MBA 6030 Chapter 2 Topical - 4 Exam With
Complete Solutions
True or False: CVP analysis investigates company personnel policies, business values, and
performance measures for a specific company. - ANSWER False
According to the CVP analysis model and assuming all else remains the same, profits would
be increased by a(n): - ANSWER decrease in the unit variable cost.
The contribution margin is equal to sales minus: - ANSWER variable expenses.
A company has reached its break-even point when the contribution margin __________ fixed
expenses. - ANSWER equals
Vivian's Violins has sales of $326,000, contribution margin of $184,000 and fixed costs total
$85,000. Vivian's Vilins net operating income is: - ANSWER $99,000
(184,000 - 85,000 = 99,000)
Profit = (selling price per unit x quantity sold) - (_________ expense per unit x quantity sold) -
________ expenses. - ANSWER Variable; Fixed
, Pete's Putters sells each putter for $125. The variable cost is $60 per putter and fixed costs
total $400,000. Based on the information: - ANSWER The sale of 12,000 putters results in net
operating income of $380,000.
(12,000 x 65 = 780,000 - 400,000 = 380,000)
The contribution margin per putter is $65
Company A sod 200,000 units. Selling price is $7 per unit, contribution margin is $4 per unity,
and the fixed expenses total $632,000. Company A's profit (loss) is: - ANSWER $168,000
(Profit = 200,000 x 4 - 632,000 = 168,000)
The calculation of contribution margin (CM) ratio is: - ANSWER contribution margin/sales
Gifts Galore had $189,000 of Sales Revenue from wrapping paper sales last year. Total
contribution margin was $100,170 and total fixed expenses were $27,500. the contribution
margin ratio was: - ANSWER 53%
(100,170/189,000 = 53%)
Terry's Trees has reached its break-even point and has calculated its contribution margin ratio
to be 70%. For each $1 increase in sales: - ANSWER Net operating income will increase by
Complete Solutions
True or False: CVP analysis investigates company personnel policies, business values, and
performance measures for a specific company. - ANSWER False
According to the CVP analysis model and assuming all else remains the same, profits would
be increased by a(n): - ANSWER decrease in the unit variable cost.
The contribution margin is equal to sales minus: - ANSWER variable expenses.
A company has reached its break-even point when the contribution margin __________ fixed
expenses. - ANSWER equals
Vivian's Violins has sales of $326,000, contribution margin of $184,000 and fixed costs total
$85,000. Vivian's Vilins net operating income is: - ANSWER $99,000
(184,000 - 85,000 = 99,000)
Profit = (selling price per unit x quantity sold) - (_________ expense per unit x quantity sold) -
________ expenses. - ANSWER Variable; Fixed
, Pete's Putters sells each putter for $125. The variable cost is $60 per putter and fixed costs
total $400,000. Based on the information: - ANSWER The sale of 12,000 putters results in net
operating income of $380,000.
(12,000 x 65 = 780,000 - 400,000 = 380,000)
The contribution margin per putter is $65
Company A sod 200,000 units. Selling price is $7 per unit, contribution margin is $4 per unity,
and the fixed expenses total $632,000. Company A's profit (loss) is: - ANSWER $168,000
(Profit = 200,000 x 4 - 632,000 = 168,000)
The calculation of contribution margin (CM) ratio is: - ANSWER contribution margin/sales
Gifts Galore had $189,000 of Sales Revenue from wrapping paper sales last year. Total
contribution margin was $100,170 and total fixed expenses were $27,500. the contribution
margin ratio was: - ANSWER 53%
(100,170/189,000 = 53%)
Terry's Trees has reached its break-even point and has calculated its contribution margin ratio
to be 70%. For each $1 increase in sales: - ANSWER Net operating income will increase by
