ACCT 212 Week 8 Final Exam With Rationale
The amount remaining from sales revenue after variable expenses have been
deducted. - ANSWER: Contribution Margin
helpful to managers in judging the impact on profits of changes in selling price, cost,
or volume. The emphasis is on cost behavior. - ANSWER: Contribution Income
Statement
Contribution Margin covers __1__ first and then remaining CM goes to...2... -
ANSWER: 1) Fixed Expenses
2) Net Operating Income
These can be expressed on a per unit basis... - ANSWER: Sales
Variable Expenses
Contribution Margin
Profit = (Sales - Variable Expenses) = Contribution Margin - Fixed Expenses -
ANSWER: Net Operating Income of Contribution Format Income Statement
Horizontal (X) axis of CVP graph - ANSWER: Units
Vertical (Y) axis of CVP graph - ANSWER: Dollars
Contribution Margin / Sales = ?
OR
Contribution Margin per Unit / Selling Price per Unit = ? - ANSWER: CM ratio
Variable Expenses / Sales = ? - ANSWER: Variable Expense Ratio
Coffee Klatch is an espresso stand in a downtown office building. The average selling
price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36.
The average fixed expense per month is $1,300. An average of 2,100 cups are sold
each month. What is the CM Ratio for Coffee Klatch?
A) 1.319
B) 0.758
C) 0.242
D) 4.139 - ANSWER: B) .0758
CM Ratio = Unit Contribution Margin / Unit Selling Price ... ($1.49 - $0.36) / $1.49 ...
$1.13 / $1.49 = 0.758
Profit = (CM Ratio x Sales) - Fixed Expense - ANSWER: Increase in Sales Volume
Profit = (Unit CM x Quantity) - Fixed Expenses - ANSWER: Break-Even Equation
, Fixed Expenses / Unit CM = ? - ANSWER: Unit Sales to Break Even
Fixed Expenses / CM Ratio = ? - ANSWER: Dollar Sales to Break Even
Coffee Klatch is an espresso stand in a downtown office building. The average selling
price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36.
The average fixed expense per month is $1,300. An average of 2,100 cups are sold
each month. What is the break-even sales dollars?
CM Ratio = 0.758
A) $1,300
B) $1,715
C) $1,788
D) $3,129 - ANSWER: B) $1,715
Break Even in Sales = Fixed Expenses / CM Ratio ... $1,.758 = $1,715
Coffee Klatch is an espresso stand in a downtown office building. The average selling
price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36.
The average fixed expense per month is $1,300. An average of 2,100 cups are sold
each month. What is the break-even sales in units?
A) 872 Cups
B) 3,611 Cups
C) 1,200 Cups
D) 1,150 - ANSWER: D) 1,150 Cups
Break-Even = Fixed Expenses / CM per Unit ... $1,300 / ($1.49/Cup - $0.36/Cup) ...
$1,300 / ($1.13/Cup) = 1,150 Cups
How to compute the number of units that must be sold to attain a target profit using
either... - ANSWER: 1) Equation Method
2) Formula Method
(Target Profit + Fixed Expenses) / CM per Unit = ? - ANSWER: Unit Sales to attain the
Target Profit
(Taget Profit + Fixed Expense) / CM Ratio = ? - ANSWER: Dollar Sales to attain the
Target Profit
Coffee Klatch is an espresso stand in a downtown office building. The average selling
price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36.
The average fixed expense per month is $1,300. Use the formula method to
determine how many cups of coffee would have to be sold to attain target profits of
$2,500 per month.
A) 3,363 Cups
B) 2,212 Cups
C) 1,150 Cups
The amount remaining from sales revenue after variable expenses have been
deducted. - ANSWER: Contribution Margin
helpful to managers in judging the impact on profits of changes in selling price, cost,
or volume. The emphasis is on cost behavior. - ANSWER: Contribution Income
Statement
Contribution Margin covers __1__ first and then remaining CM goes to...2... -
ANSWER: 1) Fixed Expenses
2) Net Operating Income
These can be expressed on a per unit basis... - ANSWER: Sales
Variable Expenses
Contribution Margin
Profit = (Sales - Variable Expenses) = Contribution Margin - Fixed Expenses -
ANSWER: Net Operating Income of Contribution Format Income Statement
Horizontal (X) axis of CVP graph - ANSWER: Units
Vertical (Y) axis of CVP graph - ANSWER: Dollars
Contribution Margin / Sales = ?
OR
Contribution Margin per Unit / Selling Price per Unit = ? - ANSWER: CM ratio
Variable Expenses / Sales = ? - ANSWER: Variable Expense Ratio
Coffee Klatch is an espresso stand in a downtown office building. The average selling
price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36.
The average fixed expense per month is $1,300. An average of 2,100 cups are sold
each month. What is the CM Ratio for Coffee Klatch?
A) 1.319
B) 0.758
C) 0.242
D) 4.139 - ANSWER: B) .0758
CM Ratio = Unit Contribution Margin / Unit Selling Price ... ($1.49 - $0.36) / $1.49 ...
$1.13 / $1.49 = 0.758
Profit = (CM Ratio x Sales) - Fixed Expense - ANSWER: Increase in Sales Volume
Profit = (Unit CM x Quantity) - Fixed Expenses - ANSWER: Break-Even Equation
, Fixed Expenses / Unit CM = ? - ANSWER: Unit Sales to Break Even
Fixed Expenses / CM Ratio = ? - ANSWER: Dollar Sales to Break Even
Coffee Klatch is an espresso stand in a downtown office building. The average selling
price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36.
The average fixed expense per month is $1,300. An average of 2,100 cups are sold
each month. What is the break-even sales dollars?
CM Ratio = 0.758
A) $1,300
B) $1,715
C) $1,788
D) $3,129 - ANSWER: B) $1,715
Break Even in Sales = Fixed Expenses / CM Ratio ... $1,.758 = $1,715
Coffee Klatch is an espresso stand in a downtown office building. The average selling
price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36.
The average fixed expense per month is $1,300. An average of 2,100 cups are sold
each month. What is the break-even sales in units?
A) 872 Cups
B) 3,611 Cups
C) 1,200 Cups
D) 1,150 - ANSWER: D) 1,150 Cups
Break-Even = Fixed Expenses / CM per Unit ... $1,300 / ($1.49/Cup - $0.36/Cup) ...
$1,300 / ($1.13/Cup) = 1,150 Cups
How to compute the number of units that must be sold to attain a target profit using
either... - ANSWER: 1) Equation Method
2) Formula Method
(Target Profit + Fixed Expenses) / CM per Unit = ? - ANSWER: Unit Sales to attain the
Target Profit
(Taget Profit + Fixed Expense) / CM Ratio = ? - ANSWER: Dollar Sales to attain the
Target Profit
Coffee Klatch is an espresso stand in a downtown office building. The average selling
price of a cup of coffee is $1.49 and the average variable expense per cup is $0.36.
The average fixed expense per month is $1,300. Use the formula method to
determine how many cups of coffee would have to be sold to attain target profits of
$2,500 per month.
A) 3,363 Cups
B) 2,212 Cups
C) 1,150 Cups
