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According to the CVP analysis model and assuming all else remains the same, profits would be increased by a(n) ______.
decrease in the unit variable cost
   
Daisy's Dolls sold 30,000 dolls this year. Each doll sold for $40 and had a variable cost of $19. Fixed expenses were $250,000.
Net operating income for the year is ______.
$380,000
 
30,000 × ($40 - $19) - $250,000 = $380,000
   
The contribution margin equals sales minus ______.
all variable costs
   
Which of the following items are found above the contribution margin on a contribution margin format income statement?
Variable expenses
   
A product has a selling price of $10 per unit, variable expenses of $6 per unit and total fixed costs of $35,000. If 10,000 units are sold, net operating income will be $___
5000
 
(10-6) x 10000 - 35000 = 5000
   
CVP analysis focuses on how profits are affected by ______.
selling price
total fixed costs
unit variable cost
mix of products sold
sales volume.
   
Vivian's Violins has sales of $326,000, contribution margin of $184,000 and fixed costs total $85,000.
Vivian's Violins net operating income is ______.
$99,000
 
$184,000 - $85,000 = $99,000
   
The break-even point is the level of sales at which the profit equals ______
zero
  Contribution margin is first used to cover __________ expenses. Once the break-even point has been reached, contribution margin becomes __________
fixed
profit or income
   
A company reported $100,000 in sales and $80,000 in variable costs at the breakeven point of 200 units. If the company sells 201 units, net profit will be ______.
$100
 
($100,000 - $80,000) ÷ 200 or $100.
   
Total contribution margin equals ______.
fixed expenses plus net operating income
 
Net operating income equals ______.
(unit sales - unit sales to break even) × unit contribution margin
   
A company sold 20,000 units of its product for $20 each.
Variable cost per unit is $11. Fixed expenses total $150,000. The company's contribution margin is ______.
$180,000
 
20,000 x ($20-$11) = $180,000
   
Given a sales price of $100, variable costs of $70 and a break-even point of 500 units,
net operating profit for sale of 501 units will be $______.
$30
 
100 – 70 = 30
   
Profit = (selling price per unit × quantity sold) - (_________ expense per unit × quantity sold) - __________ expenses.
variable
fixed
   
Once the break-even point is reached, the sale of an additional unit increases contribution margin by an amount that is ______ the increase in net operating income.
equal to
   
Ceramic Creations sells pots for $25. The variable cost per pot is $12 and 15,000 pots must be sold to break-even.
If Ceramic Creations sells 25,000 pots, net operating income will be ______.
$130,000
 
Net income = (25,000 - 15,000) × ($25 - $12) = $130,000.
   
Company A has sales of $500,000, variable costs of $350,000, and fixed costs of $150,000. Company A has ______.
reached the break-even point
a contribution margin equal to fixed costs
   
Pete's Putters sells each putter for $125. The variable cost is $60 per putter and fixed costs total $400,000. Based on this information ______.
the sale of 12,000 putters results in net operating income of $380,000
   
The break-even point is reached when the contribution margin is equal to ______.
total fixed expenses
   
After reaching the break-even point, a company's net operating income will increase by
the __________ __________ per unit for each additional unit sold.
contribution
margin
   
To prepare a CVP graph, lines must be drawn representing total revenue, ______.
total expense, and total fixed expense
   
Net operating income equals ______.
(unit sales - unit sales to break even) × unit contribution margin
   
A company has reached its break-even point when the contribution margin __________ fixed expenses.
equals
   
Company A's product sells for $90 and has a variable cost of $35 per unit. Fixed costs total $550,000.
If Company A sells 16,000 units, the contribution margin per unit is ______.
$55
 
$90 -$35 = $55.
   
Given sales of $1,452,000, variable expenses of $958,320 and fixed expenses of $354,000,
the contribution margin ratio is ______.
34%
 
($1,452,000 - $958,320) ÷ $1,452,000 = 34%.
   
The break-even point is the level of sales at which the profit equals __________.
zero
   
The equation used to calculate the variable expense ratio using total values is total variable expenses divided by total ______.
sales
   
When constructing a CVP graph, the vertical axis represents ______.
dollars
   
Spice sells paprika for $9.00 per bottle. Variable cost is $2.43 per bottle and Spice's annual fixed costs are $825,000.
The variable expense ratio for paprika is ______.
27%
 
2.43 / 9 x 100
   
A company's break-even point is 17,000 units.
If the contribution margin is $22 per unit and 26,000 units are sold, net operating profit will be ______.
$198,000
 
 (26,000 - 17,000) × $22 = $198,000
   
Terry's Trees has reached its break-even point and has a contribution margin ratio of 70%. For each $1 increase in sales ______.
Net operating income will increase by $0.70
Total contribution margin will increase by $0.70
   
The calculation of contribution margin (CM) ratio is ______.
contribution margin ÷ sales
   
Company A has fixed costs of $564,000 and wishes to earn a profit of $800,000 this year.
If Company A has a contribution margin ratio of 62%, what amount of sales dollars must be sold to reach the target profit?
$2,200,000


 ($564,000 + $800,000) / 0.62 = $2,200,000
   
Gifts Galore had sales revenue of $189,000. Total contribution margin was $100,170 and total fixed expenses were $27,500.
The contribution margin ratio was ______.
53%
 
100,170 / 189,000 = 53%
   
Anne's Antique Store has a contribution margin ratio of 29%.
The break-even point has been reached. If the store generates an additional $600,000 of sales for the year,
net operating income will increase by ______.
$174,000
 
$600,000 × 29% = $174,000
   
The variable expense ratio is the ratio of variable expense to ______.
sales
   
A company has a target profit of $204,000. The company's fixed costs are $305,000.
The contribution margin per unit is $40. The BREAK-EVEN point in unit sales is ______.
7,625 Units
 
$305,000 / $40 = 7,625 Units
   
Seating Galore sells high-end desk chairs. The variable expense per chair is $85.05 and the chairs sell for $189.00 each.
The variable expense ratio for Seating Galore's chairs is _____%
45
   
Company A has a contribution margin ratio of 35%. For each dollar in sales, contribution margin will increase by ______.
$0.35
   
To calculate profit, multiply the _________ per unit by sales volume and then subtract total fixed cost.
Contribution Margin
   
After reaching the break-even point, a company's net operating income will increase by the __________ __________
per unit for each additional unit sold. (Enter only one word per blank.)
Contribution Margin
   
CVP analysis allows companies to easily identify the change in profit due to changes in:
selling price
volume
costs
   
Company A's product sells for $90 per unit and has a variable cost of $35 per unit.
If Company A sells 16,000 units and incurs total fixed costs of $550,000, the unit contribution margin is:
$55
 
Unit contribution margin = $90 - $35 = $55
   
Place the following items in the order in which sales dollars are
applied on a contribution margin income statement.
1. Variable Costs
2. Fixed Expenses
3. Net Income
   
If contribution margin is not sufficient to cover the ___________ ___________, a company will experience a net operating loss
(Enter only one word per blank.)
Fixed Expenses
   
Company A has sales of $500,000, variable costs of $350,000, and fixed costs of $150,000. Which of the following are true?
Company A has reached the break-even point.
Company A's contribution margin equals the fixed costs
   
The formula used to calculate the sales volume needed to achieve a target profit is:
Unit sales to attain a target profit = (Target profit + Fixed expenses / Unit Contribution Margin
   
The break-even point indicates the sales volume needed to make contribution margin __________ to fixed expenses
(Enter only one word per blank)
equal
   
JVL Enterprises has set a target profit of $126,000. The company sells a single product for $50 per unit.
Variable costs are $15 per unit and fixed costs total $98,000. How many units does JVL have to sell to BREAK-EVEN?
$2,800
 
98,000 / (50-15) = 2,800
   
Place the following items in the correct order in which they appear on the contribution margin format income statement
1.            Sales
2.            Variable Expenses
3.            Contribution Margin
4.            Fixed Expenses
5.            Net Operating Income
   
Solving for the sales level needed to achieve a profit of zero is the same process as solving for the sales level needed to:
break-even
   
A company has reached its break-even point when the contribution margin ____________ fixed expenses
(Enter only one word per blank)
equals
   
Variable expenses/Sales is the calculation of the ___________ __________ ratio.
variable expense
   
The calculation of contribution margin (CM) ratio is:
contribution margin/sales
   
CVP is the acronym for ___________ - ____________ - ____________
cost - volume - profit
   
At the break-even point:
Net Operating income is zero
Total Revenue equals total cost
   
Blissful Blankets hopes to achieve a profit this year of $520,000. Each blanket has a contribution margin of $21.
Fixed costs for the company are $320,000.
How many blankets does Blissful Blankets need to sell in order to achieve its target profit?
40,000
 
(520,000 + 320,000) / 21 = 40,000
   
The break-even point is the level of sales at which the profit equals __________.
zero
   
Candle Central has $1,440 of total variable expense for a sales level of 600 units and $2,160 of total variable expense for a sales
level of 900 units. If Candle Central sells 500 units, which of the following statements would be true?
Total Variable cost is $1,200
The Variable cost per unit is $2.40
   
Anne's Antique Store has a contribution margin ratio of 29%. The break-even point has been reached.
If the store generates an additional $600,000 of sales for the year, how will these additional sales affect net operating income?
Net operating income will increase by $174,000
 
600,000 x 29% (.29) = 174,000
   
A company sells 500 sleds per month for $80 and incurs $41 of variable cost per unit.
Fixed expenses are $3,500 per month.
The company thinks that using a new material would increase sales by 70 units per month.
The new material would increase variable costs by $9 per unit.
Calculate the change in profit if the company starts using the new material.
$2,400 decrease
 
80 – 41 = 39
39 x 500 = 19,500
80 – 41 = 39
39 – 9 = 30
500 + 70 = 570
30 x 570 = 17,100
19,500 – 17,100 = 2,400
   
For a single-product company, the margin of safety in _________ form is calculated by dividing the margin of safety in
dollars by the selling price per unit.
unit
   
Which of the following items are needed to solve for net operating income at any projected sales volume above the break-even point?
Projected unit sales
Contribution margin per unit
Break-even unit sales
   
In order to convert the margin of safety from dollar form to percentage form, the margin of safety in dollars must
be ____________ by the budgeted (or actual) sales in dollars.
divided
   
A company has total sales of $1,430,000. Fixed expenses are $657,000 and the contribution margin ratio is 67%.
What is the company's profit?
$301,100
 
67% (.67) x 1,430,000 - 657,000 = 301,100
   
Terry's Trees has reached its break-even point and has calculated its contribution margin ratio to be 70%.
Each $1 increase in sales will have which of the following effects?
Net operating income will increase by $0.70
Total contribution margin will increase by $0.70
   
Company A has fixed costs of $564,000 and wishes to earn a profit of $800,000 this year.
If Company A has a contribution margin ratio of 62%, what amount of sales dollars must be sold to reach the target profit?
$2,200,000
 
564,000 + 800,000) / 0.62 = 2,200,000
   
Pretty in Pearls sold 95 necklaces last month. If variable cost per unit is $40 and fixed costs total $3,085,
the company’s total variable cost was:
$3,800
 
95 x 40 = 3,800
   
The break-even point is the level of sales at which the profit equals ____________
(enter only one word per blank)
zero
   
A company's selling price is $90 per unit; its variable cost per unit is $28; and its total fixed expenses are $320,000.
What sales volume is needed to achieve the target profit of $200,800
8,400 units
 
(320,000 + 200,800) / (90 - 28)
   
Which of the following items are needed to solve for net operating
income at any projected sales volume above the break-even point?
Projected unit sales
contribution margin per unit
break-even unit sales
   
Selling price per unit multiplied by the quantity sold equals total __________. (Enter only one word per blank)
sales
   
A company has a target profit of $204,000. The company's fixed costs are $305,000.
The contribution margin per unit is $40. What is the BREAK-EVEN point in unit sales?
7,625 units
 
305,000 / 40 = 7,625
   
Candle Central has $1,440 of total variable expense for a sales level of 600 units and $2,160 of total variable
expense for a sales level of 900 units. If Candle Central sells 500 units, which of the following statements would be true?
The variable cost per unit is $2.40.          (1,440 / 600)
Total variable cost is $1,200                        (1,440 / 600 = 2.40 x 500 = 1,200)
   
To estimate the effect on profits for a planned increase in sales,
multiply the increase in units sold by the unit __________ _________
Contribution Margin
   
Plush & Cushy sells high-end desk chairs.
The variable expense per chair is $85.05 and the chairs sell for $189.00 each.
The variable expense ratio for Plush & Cushy's chairs is:
45%
 
85.05 / 189 = 0.45 x 100 = 45%
   
The amount by which sales can drop before losses are incurred is the ___________ of _________
margin of safety
   
A company's current budget shows the following: budgeted sales are $982,000, break-even sales are $932,200,
and fixed expenses are $429,000. The company's margin of safety in dollars is:
$49,800
 
982,000 - 932,200 = 49,800
   
Daisy's Dolls sold 30,000 dolls this year at $40 each. The company incurred $250,000 of fixed expenses.
Each doll's variable cost is $19. What is Daisy's Dolls' net operating income?
$380,000
 
30,000 X (40 - 19) - 250,000 = 380,000
   
When a company has a specific net operating income it wishes to achieve,  determining required sales to
achieve the specific income is done by using _________ _________ analysis
target profit analysis
   
A company's selling price is $90 per unit, variable cost per unit is $28 and total fixed expenses are $320,000.
The number of unit sales needed to earn a target profit of $200,800 is ______.
8,400 units
 
($320,000 + $200,800) ÷ ($90 - $28) = 8,400 units
   
Contribution margin ratio is equal to _________    __________ divided by __________.
contribution
margin
sales or revenue
   
Adam's Sports Store has a contribution margin ratio of 55% and has already passed the break-even point for the year.
If Adam's generates additional sales of $250,000 by year-end, net operating income will increase by ______.
$137500
 
$250000 * 55% = $137500
   
Run Like the Wind sells ceiling fans. Target profit for the year is $470,000.
If each fan's contribution margin is $32 and fixed costs total $222,640, the number of fans required to meet the company's goal is ______.
21,645
 
 ($470,000 + $222,640) ÷ $32 = 21,645
   
JVL Enterprises has set a target profit of $126,000. The company sells a single product for $50 per unit.
Variable costs are $15 per unit and fixed costs total $98,000. How many units does JVL have to sell to BREAK-EVEN?
2,800
 
$2,80098,000 / (50-15) = 2,800
   
Company A has fixed costs of $564,000 and wishes to earn a profit of $800,000 this year.
If Company A has a contribution margin ratio of 62%, sales dollars needed to reach the target profit equals ______.
$2,200,000
 
($564,000 + $800,000) ÷ 0.62 = $2,200,000
   
Spice sells paprika for $9.00 per bottle. Variable cost is $2.43 per bottle and Spice's annual fixed costs are $825,000.
The variable expense ratio for paprika is ______.
27%
 
$2.43 ÷ $9.00 or 27%.
   
Which of the following statements is correct?
the higher the margin of safety, the lower the risk of incurring a loss
   
Blissful Blankets' target profit is $520,000. Each blanket has a contribution margin of $21.
Fixed costs are $320,000. The number of blankets Blissful Blankets need to sell in order to achieve its target profit is ______.
40,000
 
(520,000 + 320,000) / 21 = 40,000
   
Budgeted sales are $982,000, break-even sales are $932,200, and fixed expenses are $429,000.
The company's budgeted margin of safety in dollars is ______.
$49,800
 
$982,000 - $932,000 = $49,800
   
The calculation of contribution margin (CM) ratio is ______.
contribution margin ÷ sales
 
Paula's Perfumes has a target profit of $4,000 per month. Perfume sells for $15.00 per bottle and variable costs are $13.50 per bottle.
Fixed costs are $3,200 per month. The number of bottles that must be sold each month to earn the target profit is ______.
 (4000 + 3200) / (15.00 - 13.50) = 4,800 bottles
   
The term "cost structure" refers to the relative proportion of __________ and __________ costs in an organization.
variable
fixed
   
Softie, Inc. produces facial tissues. The company's contribution margin ratio is 77%.
Fixed expenses are $240,400. To achieve a target profit of $930,000, Softies' sales must be ______.
$1,520,000
 
 (240,400 + 930,000) ÷ 0.77= 1,520,000
   
The amount by which sales can drop before losses are incurred is the __________ of _________.
margin
safety
   
A company with a high ratio of fixed costs ______.
is more likely to experience greater profits when sales are up than a company with mostly variable costs.
is more likely to experience a loss when sales are down than a company with mostly variable costs
   
Seth's Speakers had actual sales of $1,630,000 If break-even sales equals $935,000, Seth's margin of safety in dollars is ______.
$695,000
 
$1,630,000 - $935,000 = $695,000
   
Operating leverage is a measure of how sensitive ______ is to a given percentage change in sales dollars.
net operating income
   
Contribution margin ratio is equal to ______   ______ divided by ______.
contribution
margin
sales or revenue
   
True or false: Cost structure refers to the relative portion of product and period costs in an organization.
False
   
If operating leverage is high, a small percentage increase in sales produces a __________(higher/lower) percentage increase in net operating
income than if operating leverage is low.
higher
   
True or false: Without knowing the future, it is best to have a cost structure with high variable costs.
False
   
A measure of how sensitive net operating income is to a given percentage change in sales dollars is known as operating ___________.
leverage
   
The calculation of contribution margin (CM) ratio is ______.
contribution margin ÷ sales
   
To calculate the degree of operating leverage, divide __________   __________ by net operating income.
contribution
margin
   
Adams, Inc. has sales of $100,000 with a contribution margin of $60,000 and net income of $20,000. Baron, Inc.
has sales of $110,000 with a contribution margin of $44,000 and net income of $22,000. Thus, the
degree of operating leverage is __________ for Adams, Inc. and __________ for Baron, Inc.
three
two
   
A 15% increase in sales resulted in a 40% increase in net income for Company A and a 60% increase in net income for Company B.
Based on this, which company has the greater operating leverage?
Company B
   
The term used for the relative proportion in which a company's products are sold is ______.
sales mix
   
A company with a high ratio of fixed costs ______.
is more likely to experience a loss when sales are down than a company with mostly variable costs
is more likely to experience greater profits when sales are up than a company with mostly variable costs.
   
A measure of how sensitive net operating income is to a given percentage change in sales dollars is known as operating __________.
leverage
   
The relative proportions in which a company's products are sold is referred to as __________   __________.
sales, mix
   
True or false: Without knowing the future, it is best to have a cost structure with high variable costs.
false
   
Operating leverage is a measure of how sensitive ______ is to a given percentage change in sales dollars.
net operating income
   
The measure of how a percentage change in sales affects profits at any given level of sales is the ______.
degree of operating leverage
   
Adams, Inc. has sales of $100,000 with a contribution margin of $60,000 and net income of $20,000. Baron, Inc. has sales of $110,000
with a contribution margin of $44,000 and net income of $22,000. Thus, the degree of operating leverage is ___________ for
Adams, Inc. and __________ for Baron, Inc.
three
two
   
The term used for the relative proportion in which a company's products are sold is ______.
sales mix
   
Activity based costing provides managers with information that affects ______.
both fixed and variable costs
   
Activity-based costing uses numerous __________ cost pools.
activity
   
Costs that can be easily traced to individual products include ______.
sales commission
shipping costs
warranty repair costs
   
Activity-based costing only charges products for the cost of the capacity used because ______.
it results in a more stable unit product cost
products are only assigned the costs of resources they actually use
   
In ABC, any event that causes consumption of overhead resources is a(n) __________
activity
   
In activity-based costing, each cost pool accumulates costs that relate to a single __________ measure in the ABC system.
activity
   
An ABC system usually ______ a traditional cost system.
supplements
   
In activity-based costing, nonmanufacturing and manufacturing costs are assigned to products on a(n) ______ basis.
cause-and-effect
   
Unit-level activities are ______.
proportional to the number of units produced
   
Under activity-based costing, nonmanufacturing costs ______.
may be allocated to products based on cause
   
A cost pool including costs to entertain clients and make sales calls is a(n) ______ activity.
customer-level
   
Costs of unused or idle capacity are assigned to products when using a(n) __________ costing system.
absorption, traditional, or full
   
In activity-based costing, the consumption of overhead resources is caused by ______.
an activity
   
Organization-sustaining activities include ______.
preparing annual reports
setting up a computer network
heating a factory
   
An activity cost pool accumulates costs for ______ activity measure(s).
exactly one
   
A characteristic essential for successful implementation of ABC is ______.
a link to how people are evaluated and rewarded
   
What level of activity is performed each time an item of a product is produced?
unit-level
   
The final step in implementing ABC is ______.
prepare management reports
   
Customer-level activities include ______.
sales calls
mailing catalogs
   
The first major step when implementing an ABC system is ______.
identify the activities
   
Activity-based costing only charges products for the cost of the capacity used because ______.
products are only assigned the costs of resources they actually use
it results in a more stable unit product cost
   
When a company only produces a single product, the total variable cost can be calculated with the equation:
variable cost per unit multiplied by quantity of units sold
   
Terry's Trees has reached its break-even point and has calculated its contribution margin ratio to be 70%.
Each $1 increase in sales will have which of the following effects?
net operating income will increase by $0.70
total contribution margin will increase by $0.70
   
if the total contribution margin is less than the total fixed expenses, then a ________ will occur
net loss
   
Which of the following is the equation to solve for profit in terms of sales volume?
profit = (unit contribution margin X unit sales) - fixed expense
   
Which of the following are assumptions of cost-volume-profit analysis?
in multi product companies, the sales mix is constant
costs are linear and can be accurately divided into variable and fixed elements
   
In order to convert the margin of safety from dollar form to percentage form,
the margin of safety in dollars must be __________ by the budgeted (or actual) sales in dollars
divided
   
For a single-product company, the margin of safety in __________ form is calculated by dividing the margin
of safety in dollars by the selling price per unit
u nit
 
Multiplying unit selling price times the number of units required to break-even is one way to calculate:
break-even sales dollars
   
Given $250,000 of fixed costs per year and a contribution margin ratio of 40%, what amount of sales dollars is required to break-even
$625,000
   
Which of the following equations can be used to solve for the change in profit due to a change in sales and fixed expenses?
Change in profit = CM ratio X Change in sales - Change in fixed expenses
   
Assuming the sales price remains constant, an increase in the variable cost per unit will _________ the contribution margin per unit
decrease
   
The single point where the total revenue line crosses the total expense line on the CVP graph indicates:
the break-even point
profit equal zero
   
Net operating income can be calculated as follows:
(unit sales - unit sales to break even) X unit contribution margin
   
Gifts Galore sold $189,000 worth of wrapping paper last year. Total
contribution margin was $100,170. Calculate the contribution margin ratio
53%
   
In order to reach a target profit of $180,000, 90,000 units need to be sold.
Assuming each unit sells for $7.50, the total sales dollars needed to reach the target profit is $
$675,000
 
90,000 x 7.50
   
To calculate the impact on net income using the contribution margin ratio, _________ the change in ___________
by the contribution margin ratio
multiply; sales
   
CVP analysis is based on some ________ that may be violated in practice, but the tool is still generally useful.
assumptions
   
When constructing a CVP graph, the vertical (y) axis represents __________
dollars
   
The vertical distance between the total revenue line and the total expense line on a CVP graph represents:
the total amount of either profit or loss
   
Company A has a contribution margin ratio of 35%. For each dollar in sales, contribution margin will increase by:
$0.35
   
On a profit graph, the sales volume where profit is __________ is the break-even point
zero
   
(Sales - Variable Expenses) / Sales =
Contribution Margin Ratio
   
Adam's Sports Store has a contribution margin ratio of 55%. The break-even point has already been reached this year.
If the shop is able to generate additional sales of $250,000 by the end of the year, how
much will its net operating income change as a result of the additional sales?
Net operating income will increase by $137,500
 
250,000 x .55 - 137,500
   
To simplify CVP calculations, which of the following is assumed to remain constant?
selling price
   
When constructing a CVP graph, the horizontal (x) axis represents unit __________.
volume
   
Terry's Trees has reached its break-even point and has calculated its contribution margin ratio to be 70%.
Each $1 increase in sales will have which of the following effects?
net operating income will increase by $0.70
Total contribution margin will increase by $0.70
   
Adams, Inc. currently sells one of its products for $140 per unit. Variable costs are $75 per unit and total fixed costs are $5,000.
The company has been asked to provide 500 units to a charity at a reduced price.
The sale would not disrupt regular sales. If Adam's desired profit for this sale is $20 per unit,
the quoted price per unit will be $ 95; $75 variable cost + $20 profit. Fixed costs are not included because
they will not be impacted so the additional contribution margin
increases profits
   
When considering changes in costs and revenues, focusing only on the items that will change is called _______ ________
incremental analysis
   
For a single-product company, the margin of safety in _________ form is calculated by dividing the margin of
safety in dollars by the selling price per unit.
unit
   
Sniffles, Inc. produces facial tissues. The company's contribution margin ratio is 77%.
Fixed expenses are $2,404,000. To achieve a target profit of $9,300,000, Sniffles' sales must be:
$15,200,000
 
2,404,000 + 9,300,000) / 0.77
   
A company sold 750 units with a contribution margin of $120 per unit.
If the company has a break-even point of 450 units, what is net operating income?
$36,000
 
 (750 - 450) x 120 = 36,000
   
The CVP graph evaluates CVP relationships over a wide range of ________ levels
activity
   
The contribution margin statement is primarily used for:
internal decision making
   
Cartoon Cakes has $401,000 of fixed costs per year. The contribution margin ratio is 59%.
What amount of sales dollars is required if the company has set a target profit of $720,000 this year?
$1,900,000
 
(401,000 + 720,000) / 0.59
   
The single point where the total revenue line crosses the total expense line on the CVP graph indicates:
profit equals zero
the break-even point
   
Net operating income can be calculated as follows:
(unit sales - unit sales to break-even) X unit contribution margin
   
To prepare a CVP graph, lines must be drawn representing:
total revenue, total expense, and total fixed expense

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