ch 9 conceptual - Question Number 1 Chapter 9 Attempts 1...

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Question Number: 1 Chapter: 9 Attempts: 1 Points Scored: 32 Correct Answer: B Difficulty: Easy Learning Objective: Explain cost-volume-profit (CVP) analysis, the CVP model, and the strategic role of CVP analysis The contribution income statement would require a firm to: A) Restructure its entire accounting system. B) Separate fixed and variable costs. C) Ignore some estimated fixed expenses, such as depreciation. D) Round off amounts to the nearest dollar. E) Separate revenue into different categories. Question Number: 2 Chapter: 9 Attempts: 1 Points Scored: 32 Correct Answer: D Difficulty: Medium Learning Objective: Explain cost-volume-profit (CVP) analysis, the CVP model, and the strategic role of CVP analysis From a strategic management perspective, the primary reason a firm performs CVP analysis for breakeven planning is to find the level of sales that: A) Will just cover all fixed costs. B) Reduces the threat of bankruptcy. C) Promises a satisfactory growth in revenue. D) Assures the firm a desired level of profit. E) Will allow the firm to compete in a market place. Question Number: 3 Chapter: 9 Attempts: 2 Points Scored: 16 Correct Answer: B Difficulty: Medium Learning Objective: Apply CVP analysis for profit planning CVP analysis for revenue and cost planning has the primary objective of: A) Minimizing costs. B) Achieving the desired level of sales and profits. C) Maximizing revenue. D) Both revenue maximization and cost minimization. E) Consistently producing sales above the breakeven level. Question Number: 4 Chapter: 9 Attempts: 1 Points Scored: 32 Correct Answer: A Difficulty: Easy Learning Objective: Employ sensitivity analysis to more effectively use CVP analysis when actual sales are uncertain
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Calculating the margin of safety measure will help a firm answer which of the following questions? A) How much revenue can we lose before we drop below the breakeven point? B) Will we break even? C) How much profit will we earn? D) How much will profits change if sales change? E) Are we using our debt wisely? Question Number: 5 Chapter: 9 Attempts: 3 Points Scored: 4 Correct Answer: A Difficulty: Medium Learning Objective: Employ sensitivity analysis to more effectively use CVP analysis when actual sales are uncertain High operating leverage is a measure of the risk of change in profit a firm assumes when it has relatively: A) High fixed cost. B) High turnover. C) High variable cost. D) High sales. E) High sales expectations. Question Number: 6 Chapter: 9 Attempts: 1 Points Scored: 32 Correct Answer: C Difficulty: Easy Learning Objective: Adapt CVP analysis for multiple products CVP analysis with multiple products assumes that sales will continue at the same mix of products, expressed in either sales units or sales dollars. This assumption is essential, because a change in the product mix will probably change: A) The average sales price.
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