Question :
MULTIPLE CHOICE.
Choose the one alternative that best completes the statement : 1196223
MULTIPLE CHOICE.
Choose the one alternative that best completes the statement or answers the question. 23) CVP analysis is useful for all of the following reasons EXCEPT 23) ______ A) for long-range planning. B) for strategic planning. C) to illustrate decision outcomes. D) helping managers to answer “what-if” questions. E) eliminating uncertainty about external factors, such as interest rates.
24) A revenue driver is defined as 24) ______ A) any factor which does not affect costs associated with a revenue. B) any factor that changes when revenue changes. C) any factor which could cause a change in revenue. D) any factor which could cause a change in the costs of a related revenue object. E) any factor that affects costs and revenues.
25) Cost-volume profit is used to analyze 25) ______ A) the behaviour of some costs and revenues as changes occur in the output level. B) the behaviour of total costs, total revenues, and operating income as changes occur in the output level. C) multiple revenue drivers and a single cost driver in special case CVP. D) the behaviour of variable costs at all levels of output. E) a single revenue driver and multiple cost drivers in special case CVP.
26) Operating costs do not include 26) ______ A) income taxes. B) interest cost nor income taxes C) indirect costs. D) any cost that is not variable. E) interest cost.
27) Which of the following statements about net income (NI) is TRUE? 27) ______ A) NI = operating income + non-operating revenues less non-operating costs. B) NI = operating income – income taxes. C) NI = operating income + operating costs. D) NI = operating income less Cost of Goods Sold. E) NI = operating revenue less Cost of Goods Sold.
28) Which of the following is NOT an assumption of CVP analysis? 28) ______ A) The time value of money is not relevant. B) Costs may be separated into separate fixed and variable components. C) The unit selling price, unit variable costs, and fixed costs are known. D) Total revenues and total costs are linear in relation to output units. E) There will be a change between beginning and ending levels of inventory.
29) The breakeven point in CVP analysis is defined as the point: 29) ______ A) where the unit contribution margin equals the selling price less the unit variable cost. B) where total revenue equals fixed costs. C) where revenues less variable costs equal operating income. D) where output units equal input units. E) where total revenue equals total costs.
Use the information below to answer the following question(s).
Brian O’Neil intends to sell his customers a special round-trip airline ticket package. He is able to purchase the package from the airline carrier for $400 each. The airline intends to reimburse Brian for any unsold ticket packages. The round-trip tickets will be sold for $500 each.
30) How many units will he need to sell in order to break even assuming Brian incurred $10,000 in expenses to advertise the sale, and there are no other expenses? 30) ______ A) 20 packages B) 100 packages C) 75 packages D) 125 packages E) 25 packages
31) What would his breakeven point be assuming Brian incurred $31,200 in fixed expenses? 31) ______ A) 125 packages B) 100 packages C) 110 packages D) 232 packages E) 312 packages
32) Which of the following statements about using the equation method to determine the breakeven point is TRUE?
