Question :
73. If total fixed costs increase while variable costs and sales : 1208151
73. If total fixed costs increase while variable costs and sales price are unchanged, what happens to the break-even point?
A. The break-even point decreases, and therefore less units must be sold to break-even.
B. The break-even point increases, and therefore more units must be sold to break-even.
C. The break-even point remains the same.
D. The break-even point decreases and therefore more units must be sold to break-even.
74. When drawing a cost-volume profit graph, how would the axes be labeled?
A. The horizontal axis would be labeled with dollars (of cost or revenue), while the vertical axis would be labeled with number of units (volume or activity).
B. The horizontal axis would be labeled with dollars (of total fixed costs), while the vertical axis would be labeled with dollars (of total variable costs).
C. The horizontal axis would be labeled with number of units (volume or activity), while the vertical axis would be labeled with dollars (of cost or revenue).
D. None of the answers are correct.
75. Coburn Corporation has been operating well above its break-even point. What will happen to Coburn’s margin of safety if the variable cost per unit increases?
A. The break-even point would decrease, and the margin of safety would increase.
B. The break-even point would decrease, and the margin of safety would decrease.
C. The break-even point would increase, and the margin of safety would increase.
D. The break-even point would increase, and the margin of safety would decrease.
76. When performing sensitivity analysis, which of the following is an example of a variable that management may consider changing to answer “what if” questions?
A. Variable cost per unit
B. Sales price per unit
C. Total fixed costs
D. All of the answers are correct.
77. What happens to break-even volume when the contribution margin ratio decreases?
A. Break-even volume increases.
B. Break-even volume decreases.
C. Break-even volume stays the same.
D. None of the answers are correct.
78. Company A has variable costs per unit of $20, fixed costs of $300,000, and a break-even sales volume of 60,000 units. What will be the new break-even volume in units if variable costs increase by $2 per unit and fixed costs decrease by $100,000?
A. 133,333 units
B. 66,667 units
C. 60,000 units
D. 100,000 units
79. Company A has variable costs per unit of $20, fixed costs of $300,000, and a break-even sales volume of 60,000 units. What would happen to break-even volume in units if the sales price per unit increases by $2 and the variable cost per unit increases by $2?
A. Break-even volume increases.
B. Break-even volume decreases.
C. Break-even volume stays the same.
D. None of the answers are correct.
80. What happens to break-even volume when the sales price per unit increases?
A. Break-even volume increases.
B. Break-even volume decreases.
C. Break-even volume stays the same.
D. None of the answers are correct.
81. Assume that the company sells two products, X and Y, with contribution margins per unit of $8 and $4, respectively. What happens to the break-even volume if sales mix shifts to favor product Y? (In other words, Y makes up a higher percentage of the sales mix.)
A. Break-even volume increases.
B. Break-even volume decreases.
C. Break-even volume stays the same.
D. None of the answers are correct.
82. What is the formula for calculating contribution margin ratio?
A. Contribution margin/net income
B. Contribution margin/sales
C. Contribution margin/desired profit
D. Contribution margin/fixed costs
