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Exam 2: Costvolumeprofit Relationships

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Question 1

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A manufacturer of tiling grout has supplied the following data: The company's break-even in unit sales is closest to: (Round your intermediate calculations to 2 decimal places.)

A) 272,308
B) 98,333
C) 92,055
D) 60,488

E) A) and B)
F) A) and C)

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Question 2

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Data concerning Milian Corporation's single product appear below: Fixed expenses are $66,000 per month. The company is currently selling 1,000 units per month. Required: Management is considering using a new component that would increase the unit variable cost by $15. Since the new component would improve the company's product, the marketing manager predicts that monthly sales would increase by 200 units. What should be the overall effect on the company's monthly net operating income of this change if fixed expenses are unaffected? Show your work!

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Because fixed expenses are no...

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Question 3

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Yamakawa Corporation produces and sells a single product. Data concerning that product appear below: Required: Determine the monthly break-even in unit sales. Show your work!

Frisch Corporation produces and sells a single product. Data concerning that product appear below: Required: Determine the monthly break-even in either unit or total dollar sales. Show your work!

Brihon Corporation produces and sells a single product. Data concerning that product appear below: Required: a. Assume the company's monthly target profit is $12,650. Determine the unit sales to attain that target profit. Show your work! b. Assume the company's monthly target profit is $63,250. Determine the dollar sales to attain that target profit. Show your work!

Lister Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. If sales decline to 2,900 units, the net operating income would be closest to: (Round your intermediate calculations to 2 decimal places.)

Alpha Corporation reported the following data for its most recent year: sales, $1,000,000; variable expenses, $600,000; and fixed expenses, $300,000. The company's degree of operating leverage is closest to:

Nussbaum Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. The break-even point in unit sales is closest to:

The contribution margin ratio of Kuck Corporation's only product is 75%. The company's monthly fixed expense is $585,000 and the company's monthly target profit is $11,250. Required: Determine the dollar sales to attain the company's target profit. Show your work!

Mason Corporation's selling price was $20 per unit. Fixed expenses totaled $54,000, variable expenses were $14 per unit, and the company reported a profit of $9,000 for the year. The break-even point for Mason Corporation is:

Mcquage Corporation has provided its contribution format income statement for July. Required: a. Compute the degree of operating leverage to two decimal places. b. Using the degree of operating leverage, estimate the percentage change in net operating income that should result from a 19% increase in sales.

Hamiel Corporation produces and sells a single product. Data concerning that product appear below: Fixed expenses are $301,000 per month. The company is currently selling 5,000 units per month. Required: The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $16 per unit. In exchange, the sales staff would accept an overall decrease in their salaries of $68,000 per month. The marketing manager predicts that introducing this sales incentive would increase monthly sales by 200 units. What should be the overall effect on the company's monthly net operating income of this change? Show your work!

Mcconkey Corporation produces and sells a single product. The company's contribution format income statement for July appears below: Required: Redo the company's contribution format income statement assuming that the company sells 5,800 units.

Newham Corporation produces and sells two products. In the most recent month, Product R10L had sales of $28,000 and variable expenses of $6,440. Product X96N had sales of $22,000 and variable expenses of $7,560. The fixed expenses of the entire company were $32,710. The break-even point for the entire company is closest to:

Moyas Corporation sells a single product for $20 per unit. Last year, the company's sales revenue was $300,000 and its net operating income was $24,000. If fixed expenses totaled $96,000 for the year, the break-even point in unit sales was:

A tile manufacturer has supplied the following data: The company's contribution margin ratio is closest to:

Data concerning Lemelin Corporation's single product appear below: The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month. The marketing manager would like to cut the selling price by $18 and increase the advertising budget by $37,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 1,600 units. What should be the overall effect on the company's monthly net operating income of this change?

Giannini Inc., which produces and sells a single product, has provided the following contribution format income statement for March: Required: Redo the company's contribution format income statement assuming that the company sells 5,500 units.

Bear Publishing sells a nature guide. The following information was reported for a typical month: What is Bear's current break-even point in unit and dollars?

Data concerning Neuner Corporation's single product appear below: Fixed expenses are $425,000 per month. The company is currently selling 4,000 units per month. Required: The marketing manager would like to cut the selling price by $11 and increase the advertising budget by $23,700 per month. The marketing manager predicts that these two changes would increase monthly sales by 400 units. What should be the overall effect on the company's monthly net operating income of this change? Show your work!