1. ABC Company has provided the following cost data for last year when 100,000 units were produced and sold. The costs were as follows:

Raw materials $4.00 per unit

Direct labor $0.50 per unit

Variable manufacturing overhead $60,000

Fixed manufacturing overhead $140,000

Variable Selling & Administrative Expense $50,000

Fixed Selling & Administrative Expense $160,000

Assume there are no beginning or ending inventories, and the selling price is $15 per unit. What is the contribution margin per unit?

A. $9.40

B. $8.50

C. $7.60

D. $6.50

2. XYZ Company had the following costs for a product that sells for $10.00 each.

Variable Costs Fixed Costs

Product Costs $1.25 $10,000

Selling Costs $ .50 $30,000

Administrative Costs $ .25 $50,000

What is the net operating income for the company if it sells 100,000 units?

A. $710,000

B. $800,000

C. $910,000

D. $965,000

3. XYZ Corporations monthly target profit is $300,000. The selling price per unit is $200, variable expenses per unit are $50, and fixed expenses per month are $150,000. What is the closest number of units of product that the company must sell?

A. 1,000 units

B. 2,000 units

C. 3,000 units

D. 9,000 units

4. ABC Corporations luxury jacket production has the following data:

Selling price per unit $210.00

Variable expense per unit $70.00

Fixed expense per month $150,000

The break-even in monthly dollar sales is closest to:

A. $660,000

B. $450,000

C. $330,000

D. $225,000

5. ABC Company has introduced a second product to its retail kiosks at the mall during the holiday season. It now sells remote control airplanes with a contribution margin of $20 and remote control helicopters with a contribution margin of $12. Research shows that the company is likely to sell 3 airplanes for every helicopter that it sells. Fixed costs will remain the same at $8,640 for the holiday season. How many total remote control toys are sold at breakeven?

A. 540 remote control toys

B. 480 remote control toys

C. 270 remote control toys

D. 120 remote control toys