Summary ACCT 212 Chapter 5 Reading Assignment Liberty University answers complete solutions (latest 2022/2023) Complete many different versions to get an A on your grade! The below shown is just one version sample. A company has sales of $125,000, variable costs

ACCT 212 Chapter 5 Reading Assignment Liberty University answers complete solutions (latest 2022/2023) Complete many different versions to get an A on your grade! The below shown is just one version sample. A company has sales of $125,000, variable costs of $45,000 and fixed costs of $30,000. The contribution margin ratio is The break-even point is the sales level at which a company: Match each cost estimation method to its characteristics Which of the following is the correct statement about variable costs? Which of the following is the correct statement about fixed costs? The ACC Tutoring Service provides a tutoring to accounting students. The volume of tutoring is low at the beginning of the semester and increases before exams. ACC had its highest level of service in May when they provided 4300 hours of tutoring at a total cost of $ and it lowest level of service in January when they provided 1500 hours of tutoring at a total cost of $55000. Using the high-low method, the estimated fixed costs are Managers make assumptions in CVP analysis. These assumptions include: - A(n) _____ cost remains unchanged in amount when the volume of activity varies from period to period within the relevant range. A company has a degree of operating leverage of 2.5. If sales increase by 10%, then profits will: - The ACC Tutoring Service provides tutoring to accounting students. The volume of tutoring is low at the beginning of the semester and increases before exams. ACC had its highest level of service in May when they provided 4300 hours of tutoring at a total cost of $125,000 and its lowest level of service in Janurary when they provided 1500 hours of tutoring at a total cost of $55,000 . Using the high-low method, the estimated variable cost per hour is A manufacturing company incurs direct materials costs of $6 per unit. The total direct materials cost is A company has pre-tax income of $125,000 and an income tax rate of 35%. The after-tax income is On a CVP chart, on either side of the break-even point, the vertical distance between the total sales line and the total cost line represents; Assuming all other factors remain constant, if variable cost per unit increases, then the break-even point will: On a CVP chart, the line which crosses the vertical axis at the level of fixed costs and slopes upwards represents --- costs A company has break-even sales of $200,000. If the company expects sales of $500,000, the margin of safety is A company has a margin of safety of 20%. If expected sales are $50000, then break-even sales are: The extent, or relative size, of fixed costs in the total cost structure is known as: - operating leverage Match each example below to the correct cost type A statistical method of identifying cost behavior that is computed using spreadsheet programs or calculators is: List the cost estimation methods from the least precise to the most precise, with the least precise on top A company sells 800 units at $16 each, has variable costs of $12 per unit, fixed costs of $1200, and a 40% tax rate. The after-tax income is (800 x 16 selling price) – (800 x 12 variable costs) - $1200 fixed costs x (1-40%) = $1200 A company sells 800 units at $16 each, has variable costs of $12 per unit, fixed costs of $1,200, and a 40% tax rate. The pre-tax income is: The contribution margin ratio is interpreted as the percent of: A company produces a product with variable costs of $2.50 per unit. The product sells for $5.00 per unit. The company has fixed costs of $3000 and desires a profit of $10000. The sales level in units to achieve that desired profit is ____ units A company produces a product with variable costs of $2.50 per unit. The product sells for $5.00 per unit. The company has fixed costs of $3,000 and desires a profit of $10,000. The sales level in dollars to achieve the desired profit is ( The margin of safety is: In CVP analysis, the relevant range of operations is the ____ operating range for a business. Match each example below to the correct cost type. A company has fixed costs of $50,000 while manufacturing a product that has variable costs of $14 per unit and sells for $14 per unit. The break-even point is ___ units When using the high-low method, the slope of the estimated line of cost behavior represents: the variable cost per unit. A company has break-even sales of $. If the company expects sales of $, the margin of safety is Contribution margin per unit contributes to covering ____ costs and then generating ____ on a per unit basis. Jack works on the production line at an assembly plant. Jack receives a base salary plus $1.25 per unit assembled. This is an example of a ____ cost Conventional CVP analysis requires management to classify all costs as either ____ or ____ with respect to production or sales volume RST Company produces a product that has a variable cost of $6 per unit. The company’s fixed costs are $30000. The product sells for $10 per unit. RST desires to earn a profit of $20,000. The contribution margin per unit is RST Company produces a product that has a variable cost of $6 per unit. The company’s fixed costs are $30000. The product sells for $10 per unit. RST desires to earn a profit of $20,000. The contribution margin per unit is RST company produces a produces a product that has a variable cost of $6 per unit. The company’s fixed costs are $30,000. The product sells for $10 per unit. RST desires to earn a profit of $20,000. The sales level in dollars to achieve the desire product is True or false: on a scatter diagram, the estimated line of cost behavior is the best variable fit, so it is easy to determine A company has sales of $125,000, variable costs of $45,000 and fixed costs of $30,000. The break-even point in sales dollars is A company produces a product with a contribution margin of $36. If the company incurs $62,000 in fixed costs, expected to sell 2500 units, and has a tax rate of 35%, the pre-tax income is The ABC Company had its highest level of production in May when they produced 4000 units at a total cost of $ and its lowest level of production in November when they produced 2500 units at a total cost of $87500. Using the high-low method, the estimated variable cost per unit is The amount by which a product’s unit selling price exceeds its total unit variable cost is the: A company has pre-tax income of $ and an income tax rate of 35%. The after-tax income is Managers make assumption in CVP analysis. These assumptions include: A manufacturing company incurs rent costs of $12500 per month. The company manufactured The three methods used to classify costs into their fixed and variable components includes - When preparing a scatter diagram, the estimated line of cost behavior crosses the vertical axis at the: A company has fixed costs of $50,000 while manufacturing a product that has variable costs of $4 per unit and sells for $15 per unit. The break-even point is ____ units Cost-volume-profit analysis helps managers predict how changes in ___ and ___ levels affect income A manufacturing company incurs direct materials costs of $5 per unit. The total direct materials is ____ when the company manufactures 2000 units A manufacturing company incurs direct materials cost of $6 per unit. The total direct materials cost is $12000 when the company manufactures 2,000 units - $12,000 A company incurs $12000 in direct labor costs when the produce 480 units and $12500 in direct labor costs when they produce 500 units. The direct labor cost per unit is A company sells two models of a product – basic and premium. The basic model has a variable cost of $75 and sells for $100. The premium model has a variable cost of $100 and sells for $150. If the company usually sells 5000 basic models and 25000 premium models, then the weighted-average contribution margin is Sales mix is the (volume/ratio/mix) ____ of the sales volumes for various products. A company sells two models of a product – basic and premium. The basic model has a variable cost of $75 and sells for $100. The premium model has a variable cost of $100 and sells for $150. If the company usually sells 5,000 basic models and 2,500 premium models, then the contribution margin per composite unit is ___ Acme Manufacturing recently added another shift which required the company to hire another production supervisor. The supervisor’s salary would be considered a: A company sells two models of a product – basic and premium. If the company sells 5,000 basic models and 2,500 premium models, then the sales mix can be expressed as: In multiproduct CVP analysis, a(n) ___ unit is a specific number of units of each product in proportion to their expected sales mix The cost accountant at Company C used the high-low method to determine a cost equation of $14000 plus $1.50 per unit. If the company plans to produce 200,500 units next month, then the total estimated cost will be 14000 (1.50 / unit x 200,500 units) = 14,000 300,750 = 314,750 A(n) ___ cost is one that increases a nonconstant rate as volume increases. RST company produces a product that has a variable cost of $6 per unit. The companys fixed costs are 30,000. The product sells for $10 per unit. Decrease variable cost to $4 but increase fixed cost by $15,000. The revised break-even point in dollars is $-_____ - $75000 RST company produces cost 6 per unit. Fixed costs 30,000. Product sells 10 per unit. If company sells 15000 units, the degree of operating leverage is __ - 2 Contribution margin Match each example below to the correct cost type RST company produces a product that has a variable cost of $6 per unit. The company’s fixed costs are 30,000. The products sells for $10 per unit. RST earns profit of $20,000. The margin of safety is RST company produces a product that has a variable cost of $6 per unit. The company’s fixed costs are 30000. The product sells for $10 per unit. RST desires to earn a profit of $20,000. How many units must be produced to earn $20,000 profit?? The formula used in contribution margin income statement is – sales – variable costs = contribution margin – fixed costs = net income The break-even point is the sales level at which a company: A(n) ______ cost changes in proportion to changes in volume of activity. Match each example below to correct cost type