Question 1

The least-squares regression method is:

Accepted Answer

A)   A graphical method to identify cost behavior.
B)   An algebraic method to identify cost behavior.
C)   A statistical method to identify cost behavior.
D)   The only identify cost estimation method allowed by GAAP.
E)   A cost estimation method that only uses the two extreme values.F) B) and E)
G) None of the above

Question 2

A product sells for $200 per unit, and its variable costs are 65% of sales. The fixed costs are $420,000. What is the break-even point in sales dollars?

Accepted Answer

A)   $2,100.
B)   $6,000.
C)   $420,000.
D)   $646,154.
E)   $1,200,000.F) A) and C)
G) B) and E)

Question 3

Morse Company reports total contribution margin of $48,000 and pretax net income of $12,000 for the current month. The degree of operating leverage is:

Accepted Answer

A)   4.0
B)   0.25
C)   1.25
D)   2.5
E)   250%F) B) and E)
G) A) and E)

Question 4

Cost-volume-profit analysis is a predictive tool for identifying the impact of future cost changes, price changes, and volume of activity changes.

Accepted Answer

A) True 
 B)False

Question 5

Barclay Bikes manufactures and sells three distinct styles of bicycles: the Youth model sells for $300 and has a unit contribution margin of $105; the Adult model sells for $850 and has a unit contribution margin of $450; and the Recreational model sells for $1,000 and has a unit contribution margin of $500. The company's sales mix includes: 5 Youth models; 9 Adult models; and 6 Recreational models. If the firm's annual fixed costs total $6,500,000, calculate the firm's break-even point in composite units (rounded to the nearest whole unit) .

Accepted Answer

A)   7,575 composite units.
B)   15,150 composite units.
C)   858 composite units.
D)   6,161 composite units.
E)   429 composite units.F) A) and B)
G) None of the above

Question 6

The absorption costing method is required for external financial reporting.

Accepted Answer

A) True 
 B)False

Question 7

McCoy Brothers manufactures and sells two products, A and Z in the ratio of 4:2. Product A sells for $75; Z sells for $95. Variable costs for product A are $35; for Z $40. Fixed costs are $418,500. Compute the number of units of Product Z McCoy must sell to break even.

Accepted Answer

A)   9,300.
B)   6,200.
C)   1,550.
D)   3,100.
E)   6,750.F) C) and E)
G) C) and D)

Question 8

Under absorption costing, fixed overhead costs are excluded from product costs.

Accepted Answer

A) True 
 B)False

Exam 5: Cost Behavior and Cost-Volume-Profit Analysis

Under absorption costing, fixed overhead costs are excluded from product costs.

Correct Answer
verified

Morse Company reports total contribution margin of $48,000 and pretax net income of $12,000 for the current month. The degree of operating leverage is:

Correct Answer
verified

McCoy Brothers manufactures and sells two products, A and Z in the ratio of 4:2. Product A sells for $75; Z sells for $95. Variable costs for product A are $35; for Z $40. Fixed costs are $418,500. Compute the number of units of Product Z McCoy must sell to break even.

Correct Answer
verified

The least-squares regression method is:

Correct Answer
verified

The absorption costing method is required for external financial reporting.

Correct Answer
verified

Correct Answer
verified

Cost-volume-profit analysis is a predictive tool for identifying the impact of future cost changes, price changes, and volume of activity changes.

Correct Answer
verified

A product sells for $200 per unit, and its variable costs are 65% of sales. The fixed costs are $420,000. What is the break-even point in sales dollars?

Correct Answer
verified

Exam 5: Cost Behavior and Cost-Volume-Profit Analysis

Under absorption costing, fixed overhead costs are excluded from product costs.

Correct AnswerverifiedShow Answer

Morse Company reports total contribution margin of $48,000 and pretax net income of $12,000 for the current month. The degree of operating leverage is:

Correct AnswerverifiedShow Answer

McCoy Brothers manufactures and sells two products, A and Z in the ratio of 4:2. Product A sells for $75; Z sells for $95. Variable costs for product A are $35; for Z $40. Fixed costs are $418,500. Compute the number of units of Product Z McCoy must sell to break even.

Correct AnswerverifiedShow Answer

The least-squares regression method is:

Correct AnswerverifiedShow Answer

The absorption costing method is required for external financial reporting.

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Cost-volume-profit analysis is a predictive tool for identifying the impact of future cost changes, price changes, and volume of activity changes.

Correct AnswerverifiedShow Answer

A product sells for $200 per unit, and its variable costs are 65% of sales. The fixed costs are $420,000. What is the break-even point in sales dollars?

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
verified

Correct Answer
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