Question
1. A company's product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin per unit? a.
1. A company's product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin per unit?
a. $150
b. $90
c. $60
d. $40
2. A company's contribution margin per unit is $25. If the company increases its activity level from 200 units to 350 units, how much will its total contribution margin increase?
a. $1,250
b. $8,750
c. $3,750
d. $5,000
3. If a company has fixed costs of $6,000 per month and their product that sells for $200 has a contribution margin ratio of 30%, how many units must they sell in order to break even?
a. 100
b. 200
c. 180
d. 2,000
4. A company wants to earn an income of $60,000 after taxes. If the tax rate is 32%, what must the company's pre-tax income be in order to have $60,000 after-taxes?
a. $88,235
b. $19,200
c. $79,200
d. $143,000
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