Suppl_Problems_CVP_09

# Mixers alarm clocks lamps 8 problem 12 pretty

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___________________mixers ___________________alarm clocks ___________________lamps 8

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Problem 12 Pretty Manufacturing Company sells three products, X, Y and Z, in a normal mix of 6 units of X to 3 units of Y to 4 units of Z. The company’s fixed costs are \$6,000, and the sales and cost data for the three products are as follows: X Y Z Sales Price \$7.50 \$9.00 \$12.00 Variable Costs \$2.50 \$7.00 \$9.00 Find: a) What is the firm’s normal sales mix expressed as a % of dollar sales? ______________ b) b) What is the weighted average CM%? ___________________________ c) What are the breakeven sales in \$? \$____________________________ d) What are the number of units of each product that would be sold at the breakeven level? _________________________units(X) _________________________units(Y) _________________________units(Z) 9
Problem 13 Answer the following 1. CVP analysis usually assumes at various activity levels: (a) Constant contribution-margin ratios (b) Unchanging total fixed costs (c) Both of the above (d) None of the above 2. The breakeven point would tend to be increased by: 3. Increased Labour rates for Gran Company caused an increase in the variable costs per product unit. As a result: 4. The variable-costing income statement makes a primary classification of expenses according to: 5. The traditional approach to the income statement makes a primary classification of expenses according to: (a) management functions of the business (b) cost behaviour patterns (c) relative sizes of the expenses (d) some other basis 6. Total gross margins is equal to sales minus: 7. Contribution margin is equal to sales minus: 10

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8. When the absorption-costing income statement is used:
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• Winter '12
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