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1. ABC Company must sell 1,000 units to break even with its current contribution margin of $.50 per unit. How will breakeven change if the

1. ABC Company must sell 1,000 units to break even with its current contribution margin of $.50 per unit. How will breakeven change if the contribution margin increases?

A. The number of units needed to break even will decrease.

B. The number of units needed to break even will increase.

C. The number of units needed to break even will remain the same.

D. There is not enough information to know how break even units will change.

2. Segment margin is sales minus:

A.variable expenses.

B.traceable fixed expenses.

C. variable expenses and common fixed expenses.

D. variable expenses and traceable fixed expense

3. DC Construction has two divisions: Remodeling and New Home Construction. Each division has an on-site supervisor who is paid a salary of $82,000 annually and a salaried estimator who is paid $46,000 annually. The corporate office has two office administrative assistants who are paid salaries of $50,000 and $37,000 annually. The president's salary is $153,000. How much of these salaries are common fixed expenses?

A. $153,000

B. $87,000

C. $308,000

D. $240,000

4. ABC Company, which has only one product, has provided the following data concerning its most recent month of operations. It produced 6,200 units and sold 6,000 units. There was no beginning inventory.

Variable (per unit)

Fixed (total)

Direct Materials

$15

Direct Labor

$5

Manufacturing Overhead

$8

$148,800

Selling & Administrative

$7

$81,840

What is the unit product cost under absorption costing?

A. $52.00

B. $52.80

C. $59.00

D. $28.00

5. Under variable costing, fixed manufacturing overhead costs

A. are deferred in inventory when production exceeds sales

B. are always treated as period costs

C. are released from inventory when production exceeds sales

D. are ignored

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