CMA Part 2 Section C

All of the following are assumptions of cost-volume-profit analysis except

Carson Inc. manufactures only one product and is preparing its budget for next year based on the following information.

Selling price per unit                     $ 100

Variable costs per unit                 75

Fixed costs                                        250,000

Effective tax rate                             35%

If Carson wants to achieve a net income of $1.3 million next year, its sales must be

Robin Company wants to earn a 6% return on sales after taxes. The company’s effective income tax rate is 40%, and its contribution margin is 30%. If Robin has fixed costs of $240,000, the amount of sales required to earn the desired return is

Breakeven quantity is defined as the volume of output at which revenues are equal to

Projected sales for a tent manufacturer are $510,000. Each tent sells for $850 and requires $350 of variable costs to produce. The tent manufacturer’s total fixed costs are $145,000. The tent manufacturer’s margin of safety is

For the year just ended, Silverstone Company’s sales revenue was $450,000. Silverstone’s fixed costs were $120,000 and its variable costs amounted to $270,000. For the current year sales are forecasted at $500,000. If the fixed costs do not change, Silverstone’s profits this year will be

Breeze Company has a contribution margin of $4,000 and fixed costs of $1,000. If the total contribution margin increases by $1,000, operating profit would

Wilkinson Company sells its single product for $30 per unit. The contribution margin ratio is 45% and Wilkinson has fixed costs of $10,000 per month. If 3,000 units are sold in the current month, Wilkinson’s income would be

Ticker Company sells two products. Product A provides a contribution margin of $3 per unit, and Product B provides a contribution margin of $4 per unit. If Ticker’s sales mix shifts toward Product A, which one of the following statements is correct?

Sunk costs are not relevant in the decision-making process because they are

In a management decision process, the cost measurement of the benefits sacrificed due to selecting an alternative use of resources is most often referred to as a(n)

In order to avoid pitfalls in relevant-cost analysis, management should focus on

In a joint manufacturing process, joint costs incurred prior to a decision as to whether to process the products after the split-off point should be viewed as

Profits that are lost by moving an input from one use to another are referred to as

The total cost of producing 100 units of a good is $800. If a company’s average variable cost is $5 per unit, then the company’s

A fuel company can sell 8 units of product at $450 each. However, at a selling price of $445 per unit, the company can sell 9 units. What is the marginal revenue that is derived from selling the 9^th unit?

The advantages of incorporating full product costs in pricing decisions include all the following except

Companies that manufacture made-to-order industrial equipment typically use which one of the following?

Which one of the following is not a characteristic of market-based costing?