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Accounting Brewer Chapter 6
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Questions in this quiz (16)
1The break-even point is that level of activity where:
- ATotal Revenue = Total Cost
- BVariable Cost = Fixed Costs
- CTotal Contribution Margin = The Sum of Variable costs + Fixed Costs
- DSales Revenue = Total Variable Cost
- EProfit is greater than zero
2Which of the following would produce the largest increase in the contribution margin per unit?
- AA 7% increase in the selling price
- BA 15% decrease in the selling price
- CA 14% increase in variable costs
- DA 17% decrease in fixed costs
- EA 23% increase in the number of units sold
3Which of the following would take place if a company were able to reduce its variable costs per unit?
- AIncrease CM, Increase BEP
- BIncrease CM, Decrease BEP
- CDecrease CM, Increase BEP
- DDecrease CM, Decrease BEP
- EIncrease CM, No Effect in BEP
4Which of the following would take place if a company experienced an increae in fixed costs?
- ANet income would increase
- BThe BEP would increase
- CThe CM would increase
- DThe CM would decrease
- EMore than once of the above events would occur
5A company that desires to lower its BEP should strive to:
- ADecrease selling prices
- BReduce valriable costs
- CIncrease fixed costs
- DSell more units
- EPursure more than one of the above actions
6The vertical distance between the total cost line and the total revenue line represents:
- AFixed costs
- BVariable Costs
- CProfit or loss of that volume
- DSemi-variable costs
- EThe saftey margin
7Assume that the firm whose cost structure is depicted in the figure expects to produce a loss for the upcoming period. The loss would be shown on the graph:
- ABy the area immediately above the BEP
- BBy the area immediately below the total costs line
- CBy the area diagonally to the right of the BEP
- DBy the area diagonally to the left of the BEP
- EIn some other area not mentioned above
8At a given sales volume, the vertical distance between the fixed cost line and the total cost line represents:
- AFixed costs
- BVariable costs
- CProfit or loss at that volume
- DSemivariable costs
- EThe safety margin
9Assume that the firm whose cost structure us depicted in the figure expects to produce a profit for the upcoming accounting period. The profit would be shown on the graph by the letter:
- AD
- BE
- CF
- DG
- EH
10Line C represnets the level of:
- AFixed cost
- BVariable cost
- CSemi-variable cost
- DTotal cost
- EMixed cost
11The slope of line A is equal to the:
- AFixed cost per unit
- BSelling price per unit
- CProfit per unit
- DSemi-variable cost per unit
- EUnit CM
12The slope of line B is equal to the:
- AFixed cost per unit
- BSelling price per unit
- CVariable cost per unit
- DProfit per unit
- EUnit CM
13Line A is the:
- ATotal revenue line
- BFixed cost line
- CVariable cost line
- DTotal cost line
- EProfit line
14Archie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000.
Archie:- AWill break-even by selling 8,000 units
- BWill break-even by selling 13,333 units
- CWill break-even by selling 20,000 units
- DWill break-even by selling 1,000,000 units
- ECannot break-even because it loses money on every unit sold
15Archie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000.
Each unit that the company sells will:- AIncrease overall profitability by $20
- BIncrease overall profitability by $30
- CIncrease overall profitability by $50
- DIncrease overall profitability by some other amount
- EDecrease overall profitability by $5
16Archie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000.
In order to produce a target profit of $22,000, Archie's dollar sales must total:- A$8,440
- B$21,100
- C$1,000,000
- D$1,055,000
- EAn amount other than those above
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- Description
- Quiz on Accounting Brewer Chapter 6, created by Samantha McCarthy on 19/11/2018.
- Author
- Samantha McCarthy
- Language
- English
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