Question

68. Data extracted from the accounting information system of Turner Corporation produced the following graph. The equation of the dashed line is y $25x; the equation of the solid line is y $200 $5x. 600 $500 400 $300 200 $100 The solid line represents: a) Total variable costs b) Total fixed costs c) Total costs d) Total revenues Answer: C Difficulty: Easy Learning Objective: Apply CVP calculations for a single CPA: Management Accounting 69. Data extracted from the accounting information system of Turner Corporation produced the following graph. The equation of the dashed line is y = $25: the equation of the solid line is y $200 $5x 400 $200 $100 The dashed line represents: a) Total variable costs b) Total fixed costs c) Total costs d) Total revenues Answer: d

Answer 1

The entire diagram of the above question represent the Break even Point ( CVP analysis) of Turner Corporation :

("X") Axis shows the Units Produced and Sold by the Corporation

("Y") Axis shows the Cost and Revenue

Two Equations in the Given Problem

1. Y= 25(X) Represents the total revenue Line ( Dashed Line )

Y= Total revenue, $25 =Selling Price Per unit , X= Units Sold

2. Y= 200+$5X Represents the Total cost Line ( Solid Line)

Y= Total cost , $200 = fixed cost , $5= Variable Cost per unit , X= Units Produced

The Intersect Point of Total revenue Line ( Dashed Line) and Total Cost line ( Solid Line) is Break Even Point. BEP is the Point where Firm has no Profit and No loss

Answers :

68.) C) Total Cost

69.) D) Total revenue

70.) B) Break Even Point

71) C) Units