1. Company A has fixed expenses of $150,000 and variable expenses of $75 per unit. Company B has fixed expenses of $300,000 and variable expenses of $50 per unit. The volume of unit sales necessary to produce exactly the same operating income for Company A and Company B is:

Multiple Choice

• 2,000.

• 6,000.

• 4,000.

• 8,000.

2. The contribution margin format income statement:

Multiple Choice

• results in a larger amount of operating income than the traditional income statement format.

• uses a behavior pattern classification for costs rather than a functional cost classification approach.

• is most frequently used for financial statement reporting purposes.

• emphasizes that all costs change in proportion to any change in revenues.