Question

7) If direct labor and direct material costs increase by $1 each, contribution margin ________.

A) increases by $20,000

B) increases by $14,000

C) decreases by $24,000

D) decreases by $14,000

Answer the following questions using the information below:

Alex Furniture sells a table for $850. His fixed costs are $25,000, while his variable costs are $500 per table. He currently plans to sell 175 tables this month.

8) What is the budgeted revenue for the month assuming that Alex sells 175 tables?

A) $145,750

B) $148,750

C) $150,000

D) $142,250

9) What is the budgeted operating income for the month assuming that Alex sells 175 tables?

A) $45,250

B) $37,000

C) $36,250

D) $36,750

10) Winnz sells 8,000 units resulting in $100,000 of sales revenue, $35,000 of variable costs, and $45,000 of fixed costs. The contribution margin percentage is ________.

A) 66.67%

B) 65.0%

C) 37.5%

D) 75.0%

11) Winnz sells 8,000 units resulting in $100,000 of sales revenue, $35,000 of variable costs, and $45,000 of fixed costs. To achieve $150,000 in operating income, sales must total ________.

A) $440,000

B) $160,000

C) $130,000

D) $300,000

Answer the following questions using the information below:

Star Jewelry sells 500 units resulting in $75,000 of sales revenue, $28,000 of variable costs, and $18,000 of fixed costs.

12) Breakeven point in units is ________.

A) 196 units

B) 203 units

C) 185 units

D) 192 units

Answer 1