Break-even point is that level of sale on which the company does not have any profit or loss, i.e., that point at which company only recovers its cost and fixed cost. The three areas for break-even analysis in a school and to classify it into revenue, variable cost and fixed cost.

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Instructions: Designate the best answer for each of the following questions. 1.Which of the following is a responsibility center that incurs expenses, generates revenues, and is responsible for generating a return on assets? a. Cost center b. Revenue center c. Profit center d. Investment center 2.Which one of the following is the most useful measure for evaluating a manager's performance in controlling revenues and costs in a profit center? a. Contribution margin b. Contribution net income c. Contribution gross profit d. Controllable margin 3.Hanover Corporation desires to earn target net income of $42,000. The selling price per unit is $18, unit variable cost is $5.60, and total fixed costs are $123,912. How many units must the company sell to earn its target net income? a. 13,380 b. 9,993 c. 3,387 d. 9,217 4.Remark…

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Chapter 11, Problem 11.6C

To determine

Concept Introduction:

Break-even point is that level of sale on which the company does not have any profit or loss, i.e., that point at which company only recovers its cost and fixed cost.

The three areas for break-even analysis in a school and to classify it into revenue, variable cost and fixed cost.

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Instructions: Designate the best answer for each of the following questions. 1.Which of the following is a responsibility center that incurs expenses, generates revenues, and is responsible for generating a return on assets? a. Cost center b. Revenue center c. Profit center d. Investment center 2.Which one of the following is the most useful measure for evaluating a manager's performance in controlling revenues and costs in a profit center? a. Contribution margin b. Contribution net income c. Contribution gross profit d. Controllable margin 3.Hanover Corporation desires to earn target net income of $42,000. The selling price per unit is $18, unit variable cost is $5.60, and total fixed costs are $123,912. How many units must the company sell to earn its target net income? a. 13,380 b. 9,993 c. 3,387 d. 9,217 4.Remark…

1. Why is variable costing a preferred managerial tool in profit planning? 2. What is the difference between the condensed and expanded format of contribution margin statement? 3. How is cost-volume-profit analysis different from profit planning? 4. Compare the assumptions in profit planning and cvp analysis 5. What are the four levels of learning in profit planning? 6. Present a summary of formulas/effects for each level of learning in profit planning. 7. What are the two approaches in controlling profit? 8. What are the important points to remember in preparing the breakeven point graph? The cost-volume-profit (CVP) graph?

Least-Squares Regression Method; Scattergraph; Cost Behavior Professor John Morton has just been appointed chairperson of the Finance Department at Westland University. In reviewing the department’s cost records. Professor Morton has found the following total cost associated with Finance 101 over the last five terms: Professor Morton knows that there are some variable costs, such as amounts paid to graduate assistants, associated with the course. He would like to have the variable and fixed costs separated for planning purposes. Required: 1. Prepare a scattergraph plot. (Plot total cost on the vertical axis and number of sections offered on the horizontal axis.) 2. Using the least-squares regression method, estimate the variable cost per section and the total fixed cost per term for Finance 101. Express these estimates in the form Y = a + bX. 3. Assume that because of the small number of sections offered during the Winter Term this year. Professor Morton will have to offer eight…