ACCT 3121 ch 3,15,9 TB problems

B) Budgeted revenue = 175 × $850 = $148,750

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. 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

C) Budgeted operating income = $148,750 − [(175 × $500) + $25,000] = $148,750 − $112,500 = $36,250

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. 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

a. Contribution margin $4,500 - $900 - $810 = $2,790 b. Contribution margin percentage = ($2,790/$4,500) × 100 = 62% c. Gross margin $4,500 - $900 - $630 = $2,970 d. Gross margin percentage = ($2,970/$4,500) × 100 = 66% e. Operating income $4,500 - $900 - $810 - $630 - $545 = $1,615

Arthur's Plumbing reported the following: Revenues $4,500 Variable manufacturing costs $900 Variable non manufacturing costs $810 Fixed manufacturing costs $630 Fixed non manufacturing costs $545 Required: a. Compute contribution margin. b. Compute contribution margin percentage. c. Compute gross margin. d. Compute gross margin percentage. e. Compute operating income.

C) Fixed costs of $6,000/2,000 units = Contribution Margin of $3 per unit.

At the breakeven point of 2,000 units, variable costs total $4,000 and fixed costs total $6,000. The 2,001st unit sold will contribute ________ to profits. A) $1 B) $2 C) $3 D) $5

C) Required sales = $80,000 / 0.2 = $400,000

Blistre Company operates on a contribution margin of 20% and currently has fixed costs of $500,000. Next year, sales are projected to be $3,000,000. An advertising campaign is being evaluated that costs an additional $80,000. How much would sales have to increase to justify the additional expenditure? A) $320,000 B) $380,000 C) $400,000 D) $600,000

C) Desired sales = ($96,000 + $144,000) / 0.60 = $400,000

Bovous Stores, Inc., sells several products. Information of average revenue and costs is as follows: Selling price per unit $20.00 Variable costs per unit: Direct material $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.00 Annual fixed costs $96,000 The revenues that the company must earn annually to make a profit of $144,000 are ________. A) $378,000 B) $425,000 C) $400,000 D) $450,000

A) Contribution margin percentage = ($20 − $4.00 − $1.60 − $0.40 − $2.00) / 20 = 60%

Bovous Stores, Inc., sells several products. Information of average revenue and costs is as follows: Selling price per unit $20.00 Variable costs per unit: Direct material $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.00 Annual fixed costs $96,000 What is the contribution margin percentage? A) 60% B) 66% C) 33% D) 55%

A) Revenue allocated to Y = $300 - $200 = $100

Craylon Corp sells two products X and Y. X sells for $200 and Y sells for $150. Both X and Y sell for $300 as a bundle. What is the revenue allocated to product Y, if product X is termed as the primary product in the bundle? A) $100 B) $128.50 C) $110 D) $112.85

A) $1,000N - $500N - $20,000 = 0; $500N = $20,000; N = 40 times

Dr. Charles Hunter, MD, performs a certain outpatient procedure for $1,000. His fixed costs are $20,000, while his variable costs are $500 per procedure. Dr. Hunter currently plans to perform 200 procedures this month.What is the breakeven point for the month assuming that Dr. Hunter plans to perform the procedure 200 times? A) 40 times B) 30 times C) 20 times D) 10 times

B) Amount allocated = $500,000 × 0.10 = $50,000

Emrald Corp currently uses a manufacturing facility costing $500,000 per year; 90% of the facility's capacity is currently being used. A start-up business has proposed a plan that would utilize the other 10% of the facility and increase the overall costs of maintaining the space by 5%. If the incremental method were used, what amount of cost would be allocated to the start-up business? A) $40,000 B) $50,000 C) $46,000 D) $42,000

B) (1,150 × $25) − $15,000 = $13,750

Fixed costs equal $15,000, unit contribution margin equals $25, and the number of units sold equal 1,150. Operating income is ________. A) $28,750 B) $13,750 C) $15,000 D) $14,750

C) Desired sales = ($2,000 + $23,000) / ($30 − $25) = 5,000 units

How many units would have to be sold to yield a target operating income of $23,000, assuming variable costs are $25 per unit, total fixed costs are $2,000, and the unit selling price is $30? A) 4,800 units B) 4,400 units C) 5,000 units D) 5,200 units

B) Operating income = $210,000 / (0.70) = $300,000

If Beta Corp's net income is $210,000 and the tax rate is 30%, then the company's planned operating income is ________. A) $325,000 B) $300,000 C) $273,000 D) $357,000

A

If breakeven point is 1,000 units, each unit sells for $30, and fixed costs are $10,000, then on a graph the ________. A) total revenue line and the total cost line will intersect at $30,000 of revenue B) total cost line will be zero at zero units sold C) revenue line will start at $10,000 D) total revenue line and the total cost line will intersect at $40,000 of revenue

D) Net income = [(($40 − $25) × 5,000) − $20,000] × (1.0 − 0.3) = $38,500

If selling price per unit is $40, variable costs per unit are $25, total fixed costs are $20,000, the tax rate is 30%, and the company sells 5,000 units, net income is ________. A) $32,158 B) $26,548 C) $28,500 D) $38,500

C) 1,000 × $50 = $50,000 of BE sales

If the breakeven point is 1,000 units and each unit sells for $50, then ________. A) selling 1,040 units will result in a loss B) selling $60,000 will result in a loss C) selling $50,000 will result in zero profit D) selling $45,000 will result in profit

D) $75,000/($125 − $50) = 1,000 units

Lights Manufacturing produces a single product that sells for $125. Variable costs per unit equal $50. The company expects total fixed costs to be $75,000 for the next month at the projected sales level of 1,000 units. What is the current breakeven point in terms of number of units? A) 800 units B) 1033 units C) 667 units D) 1,000 units

C) Contribution margin = ($20 − $5 − $2.60 − $0.40 − $2) × 12,000 = $120,000.

Northern Star sells several products. Information of average revenue and costs is as follows: Selling price per unit $20.00 Variable costs per unit: Direct material $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.00 Annual fixed costs $96,000 The company sells 12,000 units at the end of the year. 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

B) Contribution margin per unit = ($20 − $4 − $1.60 − $0.40 − $2) = $12

Northern Star sells several products. Information of average revenue and costs is as follows: Selling price per unit $20.00 Variable costs per unit: Direct material $4.00 Direct manufacturing labor $1.60 Manufacturing overhead $0.40 Selling costs $2.00 Annual fixed costs $96,000 The company sells 12,000 units at the end of the year. The contribution margin per unit is ________. A) $11.00 B) $12.00 C) $4.00 D) $14.00

B) Operating income = $11 − $3 − $1.50 - ($5,000 / 10,000) = $6.00

Pacific Company sells only one product for $11 per unit, variable production costs are $3 per unit, and selling and administrative costs are $1.50 per unit. Fixed costs for 10,000 units are $5,000. The operating income is ________. A) $6.50 per unit B) $6.00 per unit C) $5.50 per unit D) $5.00 per unit

B) $40,000 / ($240,000 - 60,000) / 240,000 = $53,334 (rounded up)

Pearl Lights sells only pearl necklaces. 8,000 units were sold resulting in $240,000 of sales revenue, $60,000 of variable costs, and $40,000 of fixed costs. The breakeven point in total sales dollars is ________. A) $40,000 B) $53,334 C) $100,000 D) $58,334

A) Contribution margin percentage = ($400,000 − $300,000) / $400,000 = 25%; BE sales = $50,000 / 0.25 = $200,000

Sales total $400,000 when variable costs total $300,000 and fixed costs total $50,000. The breakeven point in sales dollars is ________. A) $200,000 B) $120,000 C) $170,000 D) $210,000

C) ($7,000 − $3,000) / 400 units = $10 per unit

Shine Jewelry sells 400 units resulting in $7,000 of sales revenue, $3,000 of variable costs, and $1,500 of fixed costs. 13) Contribution margin per unit is ________. A) $4.00 B) $11.00 C) $10.00 D) $8.00

D) $3,000 / 400 = $7.50

Shine Jewelry sells 400 units resulting in $7,000 of sales revenue, $3,000 of variable costs, and $1,500 of fixed costs. Calculate the variable cost per unit. A) $11.00 B) $7.00 C) $8.00 D) $7.50

A) Number of helicopters to be sold to achieve an operating income of $300,000 = ($342,000 + $300,000) / $5,700 = 112.6 units = 113 units

Sky High sells helicopters. During the current year, 100 helicopters were sold resulting in $820,000 of sales revenue, $250,000 of variable costs, and $342,000 of fixed costs. The number of helicopters that must be sold to achieve $300,000 of operating income is ________. A) 113 units B) 102 units C) 96 units D) 100 units

C) Explanation: Contribution margin per unit = ($820,000 - $250,000) / 100 = $570,000 / 100 = $5,700 per unit. Breakeven point = $342,000 / $5,700 = 60 units

Sky High sells helicopters. During the current year, 100 helicopters were sold resulting in $820,000 of sales revenue, $250,000 of variable costs, and $342,000 of fixed costs. Breakeven point in units is ________. A) 80 units B) 64 units C) 60 units D) 78 units

D) Contribution margin per unit = ($75,000 − $28,000) / 500 = $94 Breakeven point = $18,000 / $94 = 191.49 units. Hence breakeven is approximately 192 units.

Star Jewelry sells 500 units resulting in $75,000 of sales revenue, $28,000 of variable costs, and $18,000 of fixed costs. Breakeven point in units is ________. A) 196 units B) 203 units C) 185 units D) 192 units

C) ($75,000 − $28,000) / 500 = $94 The number of units that must be sold to achieve $40,000 of operating income = ($18,000 + $40,000) / $94 = 617 units

Star Jewelry sells 500 units resulting in $75,000 of sales revenue, $28,000 of variable costs, and $18,000 of fixed costs. The number of units that must be sold to achieve $40,000 of operating income is ________. A) 677 units B) 717 units C) 617 units D) 650 units

A) $1,000N - $400N - $90,000 = $18,000 / (1 - 0.4); $600N - $90,000 = $30,000; N = 200 units

Stephanie's Bridal Shoppe sells wedding dresses. The average selling price of each dress is $1,000, variable costs are $400, and fixed costs are $90,000. How many dresses must the Bridal Shoppe sell to yield after-tax net income of $18,000, assuming the tax rate is 40%? A) 200 dresses B) 170 dresses C) 150 dresses D) 145 dresses

C) The fixed manufacturing expense attributable to each unit produced is $12 ($24,000 / 2,000 units. The number of units in the ending inventory is 300 units (1,500 - 1,200). Therefore, the total fixed manufacturing costs included in the ending inventory is $3,600 ($12 × 300 units).

Stiller Corporation incurred fixed manufacturing costs of $24,000 during 2015. Other information for 2015 includes: The budgeted denominator level is 2,000 units. Units produced total 1,500 units. Units sold total 1,200 units. Beginning inventory was zero. The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold. Fixed manufacturing costs included in ending inventory total ________. A) $4,800 B) $6,000 C) $3,600 D) 0

A) The fixed manufacturing expense attributable to each unit produced is $12 ($24,000 / 2,000 units). Since only 1,200 units have been sold during the period, the total manufacturing costs to be expensed is $14,400 ($12 × 1,200 units).

Stiller Corporation incurred fixed manufacturing costs of $24,000 during 2015. Other information for 2015 includes: The budgeted denominator level is 2,000 units. Units produced total 1,500 units. Units sold total 1,200 units. Beginning inventory was zero. The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold. Fixed manufacturing costs expensed on the income statement (excluding adjustments for variances) total ________. A) $14,400 B) $19,200 C) $24,000 D) 0

C) Different operating incomes are reported because the unit level of inventory increased during the accounting period by 300 units × $12 denominator rate = $3,600. Therefore, operating income is $3,600 higher under absorption costing because $3,600 of fixed manufacturing costs remains in inventory.

Stiller Corporation incurred fixed manufacturing costs of $24,000 during 2015. Other information for 2015 includes: The budgeted denominator level is 2,000 units. Units produced total 1,500 units. Units sold total 1,200 units. Beginning inventory was zero. The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold. Operating income using absorption costing will be ________ than operating income if using variable costing. A) $9,600 higher B) $4,800 lower C) $3,600 higher D) $14,400 lower

B) The fixed manufacturing expense attributable to each unit produced is $12 ($24,000 / 2,000 units). The total quantity budgeted to be produced during the period was 2,000 units, whereas only 1,500 units were produced. Therefore there was a variance of 500 units. The production-volume variance is $6,000 ($12 × 500 units).

Stiller Corporation incurred fixed manufacturing costs of $24,000 during 2015. Other information for 2015 includes: The budgeted denominator level is 2,000 units. Units produced total 1,500 units. Units sold total 1,200 units. Beginning inventory was zero. The company uses absorption costing and the fixed manufacturing cost rate is based on the budgeted denominator level. Manufacturing variances are closed to cost of goods sold. The production-volume variance is ________. A) $8,000 B) $6,000 C) $9,600 D) 0

B) ($440,000 − $110,000) / 11,000 = $30 per software

Tally Corp. sells softwares during the recruiting seasons. During the current year, 11,000 softwares were sold resulting in $440,000 of sales revenue, $110,000 of variable costs, and $48,000 of fixed costs. Contribution margin per software is ________. A) $10.00 B) $30.00 C) $40.00 D) $36.00

D) Price = $440,000 / 11,000 = $40.00 Sales in softwares = $60,000 / $30.00 = 2,000 softwares Operating income increase = 2,000 softwares × $30.00 per = $60,000

Tally Corp. sells softwares during the recruiting seasons. During the current year, 11,000 softwares were sold resulting in $440,000 of sales revenue, $110,000 of variable costs, and $48,000 of fixed costs. If sales increase by $60,000, operating income will increase by ________. A) $10,000 B) $40,000 C) $45,000 D) $60,000

D) [(380,000) / (120,000 + 380,000)) × $60,000] + (360,000 × $0.03) = 56,400

The Charmatz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year: Budgeted costs of operating the copying facility for 400,000 to 600,000 copies: Fixed costs per year $60,000 Variable costs 3 cents (.03) per copy Budgeted long-run usage in copies per year: Marketing Department 120,000 copies Operations Department 380,000 copies Budgeted amounts are used to calculate the allocation rates. Actual usage for the year by the Marketing Department was 80,000 copies and by the Operations Department was 360,000 copies. If a dual-rate cost-allocation method is used, what amount of copying facility costs will be allocated to the Operations Department? Assume budgeted usage is used to allocate fixed copying costs and actual usage is used to allocate variable copying costs. A) $60,490 B) $59,890 C) $57,000 D) $56,400

A) [(380,000) / (120,000 + 380,000)) × $60,000] + (380,000 × $0.03) = $57,000

The Charmatz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year: Budgeted costs of operating the copying facility for 400,000 to 600,000 copies: Fixed costs per year $60,000 Variable costs 3 cents (.03) per copy Budgeted long-run usage in copies per year: Marketing Department 120,000 copies Operations Department 380,000 copies Budgeted amounts are used to calculate the allocation rates. Actual usage for the year by the Marketing Department was 80,000 copies and by the Operations Department was 360,000 copies. If a dual-rate cost-allocation method is used, what amount of copying facility costs will be budgeted for the Operations Department? A) $57,000 B) $56,400 C) $60,490 D) $59,890

C) [(120,000) / (120,000 + 380,000)) × $60,000] + (120,000 × $0.03) = $18,000 $18,000/120,000 copies = $0.15 per copy × 80,000 = $12,000

The Charmatz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year: Budgeted costs of operating the copying facility for 400,000 to 600,000 copies: Fixed costs per year $60,000 Variable costs 3 cents (.03) per copy Budgeted long-run usage in copies per year: Marketing Department 120,000 copies Operations Department 380,000 copies Budgeted amounts are used to calculate the allocation rates. Actual usage for the year by the Marketing Department was 80,000 copies and by the Operations Department was 360,000 copies. If a single-rate cost-allocation method is used, what amount of copying facility costs will be allocated to the Marketing Department? Assume actual usage is used to allocate copying costs. A) $16,800 B) $18,000 C) $12,000 D) $9,600

A) [(120,000/ (120,000 + 380,000)) × $60,000] + (120,000 × $0.03) =$18,000

The Charmatz Corporation has a central copying facility. The copying facility has only two users, the Marketing Department and the Operations Department. The following data apply to the coming budget year: Budgeted costs of operating the copying facility for 400,000 to 600,000 copies: Fixed costs per year $60,000 Variable costs 3 cents (.03) per copy Budgeted long-run usage in copies per year: Marketing Department 120,000 copies Operations Department 380,000 copies Budgeted amounts are used to calculate the allocation rates. Actual usage for the year by the Marketing Department was 80,000 copies and by the Operations Department was 360,000 copies. If a single-rate cost-allocation method is used, what amount of copying facility costs will be budgeted for the Marketing Department? A) $18,000 B) $3,600 C) $14,400 D) $16,800

C) Breakeven sales = ($60,000 + $10,000) / 0.25 = $280,000 Selling price = $280,000 / 50,000 units = $5.60 per unit

The Marietta Company has fixed costs of $60,000 and variable costs are 75% of the selling price. To realize profits of $10,000 from sales of 50,000 units, the selling price per unit ________. A) must be $1.20 B) must be $6.00 C) must be $5.60 D) must be $4.23

a. Total costs= $4,500,000+($30 × 40,000)=$5,700,000 Single rate = $5,700,000/40,000 mh=$142.50 per maintenance-hour Single-rate budgeted amounts: Building and grounds $142.50×10,000= $1,425,000 Operating and emergency $142.50×8,000= $1,140,000 Patient care $142.50×21,000= $2,992,500 Administration $142.50×1,000= $ 142,500 b. Total costs = $4,500,000 + ($30 × 40,000) = $5,700,000 Single rate = $5,700,000 / 40,000 mh = $142.50 per maintenance-hour Single-rate allocated amounts: Building and grounds $142.50 × 12,000= $1,710,000 Operating and emergency $142.50 × 8,000 = $1,140,000 Patient care $142.50 × 22,000 = $3,135,000 Administration $142.50 × 1,200 = $ 171,000 c. Dual-rate budgeted amounts: Building and grounds: Fixed ($4,500,000 × 10/40) $1,125,000 Variable ($30 × 10,000) 300,000 Total $1,425,000 Operating and emergency: Fixed ($4,500,000 × 8/40) $ 900,000 Variable ($30 × 8,000) 240,000 Total $1,140,000 Patient care: Fixed ($4,500,000 × 21/40) $2,362,500 Variable ($30 × 21,000) 630,000 Total $2,992,500 Administration: Fixed ($4,500,000 × 1/40) $112,500 Variable ($30 × 1,000) 30,000 Total $142,500 d. Dual-rate allocated amounts: Building and grounds: Fixed ($4,500,000 × 10/40) $1,125,000 Variable ($30 × 12,000) 360,000 Total $1,485,000 Operating and emergency: Fixed ($4,500,000 × 8/40) $ 900,000 Variable ($30 × 8,000) 240,000 Total $1,140,000 Patient care: Fixed ($4,500,000 × 21/40) $2,362,500 Variable ($30 × 22,000) 660,000 Total $3,022,500 Administration: Fixed ($4,500,000 × 1/40) $112,500 Variable ($30 × 1,200) 36,000 Total $148,500

The fixed costs of operating the maintenance facility of General Hospital are $4,500,000 annually. Variable costs are incurred at the rate of $30 per maintenance-hour. The facility averages 40,000 maintenance-hours a year. Budgeted and actual hours per user for 20X3 are as follows: Budgeted hours Actual hours Building 10,000 12,000 Operating and emergency 8,000 8,000 Patient care 21,000 22,000 Administration 1,000 1,200 Total 40,000 43,200 Assume that budgeted maintenance-hours are used to calculate the allocation rates. Required: a. If a single-rate cost-allocation method is used, what amount of maintenance cost will be budgeted for each department? b. If a single-rate cost-allocation method is used, what amount of maintenance cost will be allocated to each department based on actual usage? c. If a dual-rate cost-allocation method is used, what amount of maintenance cost will be budgeted for each department? d. If a dual-rate cost-allocation method is used, what amount of maintenance cost will be allocated to each department based on actual usage? Based on budgeted usage for fixed operating costs and actual usage for variable operating costs?

A) ($125,000 + $50,000) / [($60 − $40) / $60] = $525,052

The following information is for High Corp: Selling price $60 per unit Variable costs $40 per unit Total fixed costs $125,000 If targeted operating income is $50,000, then targeted sales revenue is ________. A) $525,052 B) $533,333 C) $498,133 D) $517,072

B) ($125,000 + $25,000)/($60 − $40) = 7,500 units

The following information is for High Corp: Selling price $60 per unit Variable costs $40 per unit Total fixed costs $125,000 The number of units that High Corp must sell to reach targeted operating income of $25,000 is ________. A) 6,000 units B) 7,500 units C) 3,334 units D) 4,334 units

a. Contribution margin per tire = $110 - $85 = $25 b. N = Breakeven point in tires $110N - $85N - $475,000 = 0 $25N - $475,000 = 0 N = $475,000/$25 = 19,000 tires c. N = Target sales in tires $110N - $85N - $450,000 -$ 475,000 = 0 $25N - $925,000 = 0 N = $925,000/$25 = 37,000 tires d. Margin of safety= Sales - Breakeven sales =($110 × 33,000) - ($110 × 19,000) = $1,540,000

Tom's Tire Tower, Inc., sells tires for $110. The unit variable cost per tire is $85. Fixed costs total $475,000. Required: a. What is the contribution margin per tire? b. What is the breakeven point in tires? c. How many tires must be sold to earn a pretax income of $450,000? d. What is the margin of safety, assuming 33,000 tires are sold?

C) Absorption costing considers all variable manufacturing costs and all fixed manufacturing costs as inventoriable costs. Therefore, in this case, direct materials, direct manufacturing labor, variable manufacturing costs, and fixed manufacturing costs will be considered as inventoriable cost. The total inventoriable cost is $32.50 ($20 + $4 + $1 + $7.5*). * $750,000 / 100,000 = $7.5 per unit

Unile Auto produces and sells an auto part for $60.00 per unit. In 2015, 100,000 parts were produced and 75,000 units were sold. Other information for the year includes: Direct materials $20.00 per unit Direct manufacturing labor $ 4.00 per unit Variable manufacturing costs $ 1.00 per unit Sales commissions $ 6.00 per part Fixed manufacturing costs $750,000 per year Administrative expenses, all fixed $270,000 per year What is the inventoriable cost per unit using absorption costing? A) $25.00 B) $31.00 C) $32.50 D) $38.50

C) Variable costing considers all variable manufacturing costs as inventoriable costs. Therefore, in this case, direct materials, direct manufacturing labor, and variable manufacturing costs will be considered as inventoriable cost. The total inventoriable cost is $25 ($20 + $4 + $1).

Unile Auto produces and sells an auto part for $60.00 per unit. In 2015, 100,000 parts were produced and 75,000 units were sold. Other information for the year includes: Direct materials $20.00 per unit Direct manufacturing labor $ 4.00 per unit Variable manufacturing costs $ 1.00 per unit Sales commissions $ 6.00 per part Fixed manufacturing costs $750,000 per year Administrative expenses, all fixed $270,000 per year What is the inventoriable cost per unit using variable costing? A) $20.00 B) $24.00 C) $25.00 D) $31.00

D) Unit contribution margin = $100 − $20 = $80. Breakeven point in units = $16,000 / $80 = 200 units

What is the breakeven point in units, assuming a product's selling price is $100, fixed costs are $16,000, unit variable costs are $20, and operating income is $5,200? A) 100 units B) 300 units C) 400 units D) 200 units

B) $50,000 / (1 − 0.60) = $125,000 in BE sales

When fixed costs are $50,000 and variable costs are 60% of the selling price, then breakeven sales are ________. A) $115,000 B) $125,000 C) $175,000 D) $275,000

B) ($100,000 − $35,000) / $100,000 = 65%

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%

D) ($150,000 + $45,000) / 65% = $300,000 in sales

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

A) $80X − $30X − $70,000 = 0; X = 1,400 units

Zealz Manufacturing produces a single product that sells for $80. Variable costs per unit equal $30. The company expects total fixed costs to be $70,000 for the next month at the projected sales level of 2,000 units. In an attempt to improve performance, management is considering a number of alternative actions. Each situation is to be evaluated separately. What is the current breakeven point in terms of number of units? A) 1,400 units B) 2,250 units C) 3,333 units D) 1725 units