1.

Dimitrov Corporation, a company that produces and sells a single product, has provided its contribution format income statement for July.

Sales (6,800 units)	$401,200
Variable expenses	265,200
Contribution margin	136,000
Fixed expenses	103,500
Net operating income	$32,500

If the company sells 6,700 units, its net operating income should be closest to:

$31,979

$32,500

$28,000

$30,500

2.

Spartan Systems reported total sales of $400,000, at a price of $20 and per unit variable expenses of $11, for the sales of their single product.

	Total	Per Unit
Sales	$400,000	$20
Variable expenses	220,000	11
Contribution margin	180,000	$9
Fixed expenses	120,000
Net operating income	$60,000

What is the amount of contribution margin if sales volume increases by 30%?

$180,000

$78,000

$234,000

$42,000

3.

Maack Corporation's contribution margin ratio is 18% and its fixed monthly expenses are $53,000. If the company's sales for a month are $317,000, what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change.

$206,940

$4,060

$264,000

$57,060

4.

Solen Corporation's break-even-point in sales is $800,000, and its variable expenses are 70% of sales. If the company lost $30,000 last year, sales must have amounted to:

$770,000

$740,000

$700,000

$530,000

5.

Minist Corporation sells a single product for $10 per unit. Last year, the company's sales revenue was $250,000 and its net operating income was $42,000. If fixed expenses totaled $83,000 for the year, the break-even point in unit sales was:

25,000

12,500

29,200

16,600

6.

The Clyde Corporation's variable expenses are 40% of sales. Clyde Corporation is contemplating an advertising campaign that will cost $29,000. If sales increase by $79,000, the company's net operating income will increase by:

$31,600

$18,400

$2,600

$64,800

7.

Steeler Corporation is planning to sell 100,000 units for $2.10 per unit and will break even at this level of sales. Fixed expenses will be $87,000. What are the company's variable expenses per unit?

$0.87

$1.83

$1.23

$0.36

8.

Frank Corporation manufactures a single product that has a selling price of $20.00 per unit. Fixed expenses total $45,000 per year, and the company must sell 4,500 units to break even. If the company has a target profit of $19,000, sales in units must be:

5,991

5,450

6,400

6,750

9.

Puchalla Corporation sells a product for $140 per unit. The product's current sales are 12,500 units and its break-even sales are 11,250 units. The margin of safety as a percentage of sales is closest to:

89%

11%

10%

90%

10.

Kendall Company has sales of 2,375 units at $40 a unit. Variable expenses are 20% of the selling price. If total fixed expenses are $66,000, the degree of operating leverage is:

7.60

1.90

2.07

9.50