CHAPTER (5)COST-VOLUME-PROFIT ANALYSISQUESTIONS(A)(B)(C)(D)(E)(F)(G)(H)(I)1) The cost behavior patterns above are lettered A through G. The vertical axes of the graphs represent total dollars of expenses, and the horizontal axes represent production in units, machine hours, or direct labor hours. In each case the zero point is at the intersection of the two axes. Each graph may be used more than once.Required:Select the graph that matches the lettered cost described here:F___1.Depreciation of equipment-the amount of depreciation charged is computed by the machine hour method.H___2.Telephone bill-includes fixed amount for rental charges and another amount for telephone calls.B___3Electricity bill-flat fixed charge, plus a variable cost after a certain number of kilowatt hours areused.C___4Supervisor salary-hiring new supervisor for every 5 workers.D___5City water bill-computed as follows:First 1,000,000 gallons or less$1,000flat fee5-1
Next 10,000 gallons 0.003 per gallon usedNext 10,000 gallons 0.006 per gallon usedNext 10,000 gallons 0.009 per gallon usedF___6Total cost of wood-used in producing tables and chairs.E___7Depreciation of equipment- the amount is computed by the straight-line method.I___8.Monthly rent cost-distributed on the number of units produced per month. G___9Rent on factory building donated by the city-the agreement calls for a fixed fee payment, unless200,000 labor hours are worked, in which case no rent need be paid.E___10. Fabric costs-amount of cloth used in each dress.C___11. Salaries of repair workers-one repair worker is needed for every 1,000 machine hours or less (i.e., 0 to 1,000 hours requires one repair worker, 1,001 to 2,000 hours requires two repair workers, etc.)Multiple Choice Questions1.CVP analysis can be used to study the effect of: A.changes in selling prices on a company's profitability. B.changes in variable costs on a company's profitability. C.changes in fixed costs on a company's profitability. D.changes in product sales mix on a company's profitability. E.all of the above. 2.The break-even point is that level of activity where: 3.The unit contribution margin is calculated as the difference between:
- Fall '16
- Finance, .........