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Exam 5: Cost Behavior Cost-Volume-Profit Analysis

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Question 131

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A statistical method for identifying cost behavior is the:

A) Scatter diagram method.
B) High-low method.
C) Composite method.
D) CVP charting method.
E) Least-squares regression method.

F) B) and E)
G) A) and B)

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Question 132

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A manufacturer reports the following information below for its first three years in operation. Income for year 3 using absorption costing is:

A) $109,000.
B) $117,000.
C) $106,600.
D) $115,000.
E) $111,000.

F) A) and D)
G) B) and D)

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Question 133

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Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Compute the current margin of safety in dollars for Flannigan Company.

During its most recent fiscal year, Raphael Enterprises sold 200,000 electric screwdrivers at a price of $15 each. Fixed costs amounted to $400,000 and pretax income was $600,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year in question?

A target income refers to:

A term describing a firm's normal range of operating activities is:

Dubashi Windows manufactures two standard size windows, J and R, in the ratio of 5:3. J has a selling price of $150 and R has a selling price of $200. The variable cost of J is $75.00 and the variable cost of R is $90.00. Fixed costs are $352,500. Compute the (a) contribution margin per composite unit, (b) break-even point in composite units, (c) number of units of each product that will be sold at the break-even point.