iaiz021 Iitpstfdocs. google.comformsidlel FAlpQL SemNasrRLyASIVuPEG72nUIVINIVIe8jgDSupZTybZRizTow/viewrform ‘Test Test * Required What is your name? * Your answer Roll Number * Your answer If unit outputs exceed the breakeven point CO there will be an increase in fixed costs, CO ‘total sales revenue will exceed fixed costs CE total sales revenue will exceed variable costs CO there will be a profit Which of the following will increase a company's breakeven point? * © increasing variable cost per unit CO increasing contribution margin per unit © reducing its total fixed costs © increasing the selling price per unit 1 point 1 point 19iaiz021 Test The breakeven point is . * © where selling one more unit will not increase income where contribution margin equals fixed costs © where total revenues equal contribution margin CO fixed costs divided by revenues equals zero In the graph method of CVP analysis, the horizontal line above the x-axis represents the total cost line. * © True O FALsE A profit-volume graph shows the impact on operating income from changes in the output level. * © TRUE O Fase In the profit-volume graph the point at which the profit-volume line and x- axis intersect is the breakeven point. * © TRUE O FALSE Iitpstfdocs. google.comformsidlel FAlpQL SemNasrRLyASIVuPEG72nUIVINIVIe8jgDSupZTybZRizTow/viewrform 1 point 1 point 1 point 1 point 219iaiz021 ‘Test Stephanie's Bridal Shoppe sells wedding dresses. The average selling price 1 point of each dress is $1,200, variable costs are $700, and fixed costs are $100,000. How many dresses must the Bridal Shoppe sell to yield after-tax net income of $20,000, assuming the tax rate is 40%? * 267 dresses 240 dresses 200 dresses OoO00o0°o 400 dresses Which of the following statements about net income (NI) is true? * 1 point © Ni= operating income plus nonoperating revenue. © NI= operating income plus operating costs. © Ni= operating income less income taxes. © NI= operating income less cost of goods sold. In CVP analysis, focusing on target net income rather than operating 1 point income _ will increase the breakeven point will decrease the breakeven point will not change the breakeven point CoOO0°0 will help managers construct a better capital policy Iitpstfdocs. google.comformsidlel FAlpQL SemNasrRLyASIVuPEG72nUIVINIVIe8jgDSupZTybZRizTow/viewrform 392urz021 Test A firm operating at breakeven point will pay an income tax of 10%. * © TRUE O FALSE If a company is planning to reduce the selling price, they must believe that variable costs will decline as well the fixed costs will cover the lower sales price more units will be sold increased collections will increase income CoO00°0 A planned increase in advertising would be considered an increase in variable costs in CVP analysis. * © TRUE O Fase A planned decrease in selling price would be expected to cause an increase in the quantity sold. * © True O FALSE Iitpstfdocs. google.comformsidlel FAlpQL SemNasrRLyASIVuPEG72nUIVINIVIe8jgDSupZTybZRizTow/viewrform 49iaiz021 ‘Test The margin of safety is the difference between .* © budgeted expenses and breakeven expenses © budgeted revenues and breakeven revenues © actual operating income and budgeted operating income © actual sales margin and budgeted sales margin Globus Autos sells a single product. 8,000 units were sold resulting in 1 point $83,000 of sales revenue, $21,000 of variable costs, and $10,000 of fixed costs. If Globus reduces the selling price by $1.20 per unit, the new margin of safety is: * © 6911 units © 3,042 units © 4,958 units © 2000 units The margin of safety refers to how many more sales are needed in order to 1 point breakeven. * © TRUE O False If a company's breakeven revenue is $1,000 and its budgeted revenue is point $1,250, then its margin of safety percentage is 20%. * © True O FALSE Iitpstfdocs. google.comformsidlel FAlpQL SemNasrRLyASIVuPEG72nUIVINIVIe8jgDSupZTybZRizTow/viewrform 59iaiz021 ‘Test Sensitivity analysis is a simple approach to recognizing uncertainty. * © True O FALse is the process of varying key estimates to identify those estimates 1 that are the most critical to a decision. * © The graph method CO Asensitivity analysis © The degree of operating leverage CO Sales mix Southwestern College is planning to hold a fund raising banquet at one of _ 1 point the local country clubs. It has two options for the banquet: OPTION one: Crestview Country Club a. Fixed rental cost of $1,000 b. $12 per person for food OPTION two: Tallgrass Country Club a. Fixed rental cost of $3,000 b. $8.00 per person for food Southwestern College has budgeted $1,800 for administrative and marketing expenses. It plans to hire a band which will cost another $800. Tickets are expected to be $30 per person. Local business supporters will donate any other items required for the event. 1) Which option provides the least amount of risk? * © Option one © Option two © Both options provide the same amount of risk. © tdepends on how many donations it receives. Iitpstfdocs. google.comformsidlel FAlpQL SemNasrRLyASIVuPEG72nUIVINIVIe8jgDSupZTybZRizTow/viewrform 39iaiz021 ‘Test Ina company h low operating leverage, * 1 point CO (fixed costs are more than the contribution margin © contribution margin and operating income are inversely related CO there is a higher possibility of net loss than a higher-leveraged firm © less risk is assumed than in a highly leveraged firm Which of the following statements is true? * 1 point O Managers can lower operating risk by changing fled casts to variable costa in the long-term. © Managers can lower operating risk by changing variable costs to fixed costs in the long-term, © Managers can lower operating risk by reducing the selling price and increasing volume, © Managers can lower operating risk by inreasing the sling price and reducing volume. When a greater proportion of costs are fixed costs, then _ * 1 point © asmall increase in sales results in a small decrease in operating income © when demand is low the risk of loss is high © a decrease in sales reduces the total fixed cost per unit © a decrease in sales reduces the cost per unit Iitpstfdocs. google.comformsidlel FAlpQL SemNasrRLyASIVuPEG72nUIVINIVIe8jgDSupZTybZRizTow/viewrform 719iaiz021 ‘Test Companies with a greater proportion of direct costs have a greater risk of loss than companies with a greater proportion of indirect costs. * © TRUE CO FALSE The degree of operating leverage at a specific level of sales helps the managers calculate the effect that potential changes in sales will have on operating income. * © True O FALSE If a company increases fixed costs, then the breakeven point will be lower. © True O FALse Companies that are substituting variable costs for fixed costs receive a greater per unit return above the breakeven point. * © TRUE O Fase A company with a higher degree of operating leverage is at greater risk during economic downturns because of its higher fixed costs. * © TRUE O False Iitpstfdocs. google.comformsidlel FAlpQL SemNasrRLyASIVuPEG72nUIVINIVIe8jgDSupZTybZRizTow/viewrform 1 poi 1 1 point 1 point aiaiz021 ‘Test The risk-return tradeoff across alternative cost structures can be measured as operating leverage. * © TRUE CO FALSE When a company has the least fixed costs, the company is operating at a very high operating leverage. * © True O FALSE Submit Never submit passwords through Goosle Ft rms, This form was created outside of your domain, Repost Abuse -Tesms of Service - Privacy Policy Iitpstfdocs. google.comformsidlel FAlpQL SemNasrRLyASIVuPEG72nUIVINIVIe8jgDSupZTybZRizTow/viewrform 1 point 1 point 99