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| 1 | |
If the total fixed costs increase, the break-even point (in units) will: |
| | A) | decrease |
| | B) | increase |
| | C) | remain the same |
| | D) | remain the same, but the profit will decrease |
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| 2 | |
If the contribution margin ratio increases, the break-even point (in sales dollars) will: |
| | A) | decrease |
| | B) | increase |
| | C) | remain the same |
| | D) | remain the same, but the profit will decrease |
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| 3 | |
The break-even point (in units) for a multiproduct organisation is calculated as fixed costs divided by: |
| | A) | the weighted average unit contribution margin |
| | B) | the sum of the individual product contribution margins |
| | C) | the weighted average unit selling price |
| | D) | the weighted average unit profit |
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| 4 | |
The Silky Oak Company manufactures two products. Information about the two product lines for the coming year is as follows:
Product X: selling price per unit = $70, variable costs per unit = $50
Product Y: selling price per unit = $100, variable costs per unit = $40
Silky Oak expects that 60% of its sales (in units) will be in Product X and fixed costs will be $5400. The weighted average contribution margin is: |
| | A) | $60 |
| | B) | $46 |
| | C) | $36 |
| | D) | $24 |
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| 5 | |
The Silky Oak Company manufactures two products. Information about the two product lines for the coming year is as follows:
Product X: selling price per unit = $70, variable costs per unit = $50
Product Y: selling price per unit = $100, variable costs per unit = $40
Silky Oak expects that 60% of its sales (in units) will be in Product X and fixed costs will be $5400. The number of products Silky Oak needs to sell to break even is: |
| | A) | 90 |
| | B) | 66 |
| | C) | 118 |
| | D) | 150 |
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| 6 | |
The Silky Oak Company manufactures two products. Information about the two product lines for the coming year is as follows:
Product X: selling price per unit = $70, variable costs per unit = $50
Product Y: selling price per unit = $100, variable costs per unit = $40
Silky Oak expects that 60% of its sales (in units) will be in Product X and fixed costs will be $5400. The number of units of Product X and Product Y that must be sold for Silky Oak to break even is: |
| | A) | 90 of Product X and 60 of Product Y |
| | B) | 54 of Product X and 36 of Product Y |
| | C) | 135 of Product X and 90 of Product Y |
| | D) | 40 of Product X and 26 of Product Y |
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| 7 | |
The Silky Oak Company manufactures two products. Information about the two product lines for the coming year is as follows:
Product X: selling price per unit = $70, variable costs per unit = $50
Product Y: selling price per unit = $100, variable costs per unit = $40
Silky Oak expects that 60% of its sales in units will be in Product X and fixed costs will be $5400. The tax rate is 40%. The number of units of Product X and Product Y that must be sold for Silky Oak to earn a target net profit after tax of $21 600 is: |
| | A) | 450 of Product X and 300 of Product Y |
| | B) | 360 of Product X and 240 of Product Y |
| | C) | 690 of Product X and 460 of Product Y |
| | D) | 990 of Product X and 660 of Product Y |
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| 8 | |
Cuckoo Clock Company recently adopted an activity-based costing system. During the coming year, Cuckoo will produce 100 batches of the Black Forest model, with a selling price per clock of $85. The batch level costs are $25 per batch, the product level costs are $75 000, the facility level costs are $250 000 and the unit level costs per unit are $60. The number of Black Forest model clocks that Cuckoo Clock needs to sell to break even is: |
| | A) | 13 001 |
| | B) | 13 100 |
| | C) | 10 000 |
| | D) | 3824 |
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| 9 | |
Which of the following is not an assumption underlying CVP analysis? |
| | A) | The behaviour of total revenue is linear. |
| | B) | The behaviour of total costs is linear over the relevant range. |
| | C) | For both variable and fixed costs, sales volume is the only cost driver. |
| | D) | The number of units produced during the period exceeds the number of units sold. |
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| 10 | |
Gamma Watch Company recently adopted an activity-based costing system that also identifies customer-related costs. During the coming year, Gamma will produce 200 batches of the Sigma model with a selling price per watch of $100. The batch level costs are $25 per batch, the product level costs are $75 000, the facility level costs are $250 000 and the unit level costs per unit are $60. The customer-related costs are as follows: order level costs are $25 000, customer level costs are $14 000, market level costs are $21 000 and facility level costs are $10 000. The number of Sigma model watches that Gamma Watch Company needs to sell to break even is: |
| | A) | 13 001 |
| | B) | 13 100 |
| | C) | 10 000 |
| | D) | 3824 |
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