ACCT6111 - Fall 2022 Chapter 12 CVP - Practice Quiz 1. KAK Company sells a single product. 7,000 units were sold resulting in $70,000 of sales revenue, $28,000 of variable costs, and $12,000 of fixed costs. If sales increase by $25,000, operating income will increase by: a) $15.000 b) $22,200 c) $10,000 d) None of these answers are correct. 2. Product Cott has revenues of $200,000, a contribution margin of 20%, and a margin of safety of $80,000. What are Cott's fixed costs? a. $16,000 b. $24,000 c. $80,000 d. $96,000 3. Given for Winn Company in 2021: revenues $530,000, manufacturing costs $220,000 (one-half fixed), and marketing and administrative costs $270,000 (two-thirds variable). The contribution margin is: a. $40,000. b. $240,000. c. $310.000. d. $330,000. 4. Using the information in question 2 and ignoring inventories, the gross margin for Winn Company is: a. $40,000. b. $240,000. c. $310,000. d. $330,000. 5. Koby Company has revenues of $200,000, variable costs of $150,000, fixed costs of $60,000, and an operating loss of $10,000. By how much would Koby need to increase its revenues in order to achieve a target operating income of 10% of revenues? a. $200,000 b. $231,000 c. $251,000 d. $400,000 6. The following information pertains to Nova Co.'s CVP relationships: Breakeven point in units 1,000 Variable cost per unit $500 Total fixed costs $150,000 How much will be contributed to operating income by the 1,001st unit sold? a. $650 b. $500 c. $150 d. $07. Cleaning Care company expects to sell 5,000 mops. Fixed costs (for the year) are expected to be $8,000, unit sales price is expected to be $9, and unit variable costs are budgeted at $4. Cleaning Care's margin of safety ratio (MOS %) is: a) 32% b) 68% c) 80% d) none of the above ABC Company expects a margin of safety of 15,000 units in November. The variable expenses is $49 per unit. The contribution margin is 30% of sales. Given this information, what is the expected net operating income in November? a) $315.000 b) $220.500 c) $514.500 d) None of the above. 9. Production cost at MXD Company is a mixed cost. When 400 units are produced, the average total cost is $6.50 per unit. When 800 units are produced, the average total cost is $4.50 per unit. What is the total cost when 650 units are produced? a) $1,625 b) $3.575 c) $3.225 d) $1.834 e) None of the above 10. Seeb Glass Company uses the high-low method to analyze mixed costs. The following information relates to the production data for the first six months of the year. Month Cost Hours January $4.515 300 February $4.825 400 March $5.540 550 April $4,485 200 May $5.685 800 June $5,230 500 What is the estimated total cost at an operating level of 900 hours? A) $5.885 B) $5,745. C) $5,275. D) $5,115