82.The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year. If Burkett Corporation is able to achieve the budgeted level of sales, its margin of safety in dollars would be:
Sales (50,000 units) $1,000,000
Costs:
Direct materials$270,000
Direct labor240,000
Fixed factory overhead100,000
Variable factory overhead150,000
Fixed marketing costs 110,000
Variable marketing costs 50,000 920,000
Pretax income $80,000
A. $172,420.
B. $150,000.
C. $262,500.
D. $275,862.
E. $310,115.
83.In cost-volume-profit analysis, the unit contribution margin is:
A. Sales price per unit less cost of goods sold per unit.
B. Sales price per unit less unit fixed cost per unit.
C. Sales price per unit less total variable cost per unit.
D. Sales price per unit less unit total cost per unit.
E. The same as the contribution margin ratio.
84.The contribution margin ratio:
A. Is the percent of each sales dollar that remains after deducting the total unit variable cost.
B. Is the percent of each sales dollar that remains after deducting the total unit fixed cost.
C. Is the percent of each sales dollar that remains to cover the variable and fixed costs.
D. Cannot be used in conjunction with other analytical tools.
E. Is the same as the unit contribution margin.
85.Total contribution margin in dollars divided by pretax income is the:
A. Degree of operating leverage.
B. Contribution margin ratio.
C. Margin of safety.
D. Sales mix.
E. Break-even point in units.
86.Which of the following is the correct interpretation of a degree of operating leverage of 5?
A. Operating leverage of 5 means that sales can decrease by 5% before the firm's current level of sales will hit the break-even point.
B. Operating leverage of 5 means that if sales increase by 5% the firm will hit its break-even point.
C. Operating leverage of 5 means that if sales increase by 5%, there will be a 25% increase in the firm's pretax profit.
D. Operating leverage of 5 measures the degree of debt employed by the firm's debt structure.
E. Operating leverage of 5 means that the company would need to increase sales by 5 times in order to hit its break-even point.
87.A statistical method for identifying cost behavior is the:
A. Scatter diagram method.
B. High-low method.
C. Composite method.
D. CVP charting method.
E. Least-squares regression method.
88.The least-squares regression method is:
A. A graphical method to identify cost behavior.
B. An algebraic method to identify cost behavior.
C. A statistical method to identify cost behavior.
D. The only identify cost estimation method allowed by GAAP.
E. A cost estimation method that only uses the two extreme values.
89.A graph used to analyze past cost behaviors by displaying costs and unit data for each period as points on the diagram is called a:
A. Least-squares diagram.
B. Step-wise diagram.
C. Scatter diagram.
D. Break-even diagram.
E. Composite diagram.
90.A line on a scatter diagram that is intended to reflect the past relation between cost and unit volume is the:
A. Margin of safety line.
B. Break-even line.
C. Contribution margin line.
D. Estimated line of cost behavior.
E. Standard cost line.
91.A method that estimates cost behavior by using just the highest and lowest volume levels is called the:
A. Scatter method.
B. High-low method.
C. Least-squares method.
D. Break-even method.
E. Step-wise method.