Question

In: Accounting

1. A division sold 100,000 calculators during 2013: Sales                                &nbsp

1. A division sold 100,000 calculators during 2013:

Sales                                                                     $2,000,000

Variable costs:

      Materials                                 $380,000

      Order processing                      150,000

      Billing labor                                110,000

      Selling expenses                        60,000

      Total variable costs                                              700,000

Fixed costs                                                             1,000,000

How much is the contribution margin per unit?

Select one:

a. $2

b. $7

c. $13

d. $17

2. A company sells a product which has a unit sales price of $5, unit variable cost of $3 and total fixed costs of $180,000. The number of units the company must sell to break even is

Select one:

a. 36,000 units

b. 60,000 units

c. 90,000 units

d. 360,000 units

3. Reliable Manufacturing wants to sell a sufficient quantity of products to earn a profit of $80,000. If the unit sales price is $10, unit variable cost is $8, and total fixed costs are $160,000, how many units must be sold to earn before-tax income of $80,000?

Select one:

a. 120,000 units

b. 80,000 units

c. 1,200,000 units

d. 30,000 units

4. In 2012, Carow sold 3,000 units at $500 each. Variable expenses were $250 per unit, and fixed expenses were $250,000. The same selling price is expected for 2013. Carow is tentatively planning to invest in equipment that would increase fixed costs by 20%, while decreasing variable costs per unit by 20%. What is Carow’s break-even point in units for 2013?

Select one:

a. 1,000

b. 1,500

c. 1,250

d. 1,200

5. In a sales mix situation, at any level of units sold, net income will be higher if

Select one:

a. more higher contribution margin units are sold than lower contribution margin units

b. weighted-average unit contribution margin decreases

c. more fixed expenses are incurred

d. more lower contribution margin units are sold than higher contribution margin units

Solutions

Expert Solution

ekkarill92 answered 1 year ago
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