Notesale: Turn your study into money

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Ch 19

Which of the following is not a mixed cost?
Depreciation

Cost behavior analysis is a study of how a firm's costs
Respond to changes in the level of business activity

Why is identification of a relevant range important?
Cost behavior outside of the relevant range is not linear, chich distorts CVP analysis

The margin of safety is the difference between sales at breakeven and sales at a determined activity level T

The break-even point is where total sales equal total variable costs
...
Its warehouse sells wine with variable costs of 80% of its
unit selling price
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F

Montoya Manufacturing has fixed costs of $2,500,000 and variable costs are 40% of sales
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is planning to sell 800,000 units for $1
...
The contribution margin ratio is 20%
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Portman Company's activity for the first three months of 2013 are as follows:

Machine Hours

Electrical Cost
January
2,100

$3,600
February
2,600

$4,350
March
2,900

$4,800
Using the high-low method, how much is the cost per machine hour?
$1
...
In
April, a month of low activity, 2,000 machine hours were run and power costs amounted to $8,000
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What is
Boswell's contribution margin ratio? 45%

Murphy Company produces flash drives for computers, which it sells for $20 each
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During April, 700 drives were sold
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How much does Murphy's operating income increase for each $1,000 increase in
revenue per month? $600

Wilton Co
...
Assume that Wilton increases the selling price of
hammers by 10% on June 1
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T

The following information is available for Wade Corp
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sells MP3 players for $60 each
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How many MP3 players must Cunningham sell to earn net income of $210,000? 15,000

In CVP analysis, the term "cost" includes manufacturing costs, and selling and administrative expenses
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are 25% of sales
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If Abbey sells one unit more
than break-even units, how much will profit increase? $60



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