1.

Douglas Company sold 1,000 units of its product during the current month. The selling price is $44 and the variable cost is $27 per unit. The companys fixed expense totals $7,700 per month. The companys net operating income is:

$17,000.

$34,700.

$36,300.

$9,300.

2.

Lester Company has a single product. The selling price is $50 and the variable cost is $28.50 per unit. The companys fixed expense is $230,000 per month. What is the companys unit contribution margin? (Round your answer to 2 decimal places.)

$50.00

$28.50

$78.50

$21.50

7.

Lester Company has a single product. The selling price is $50 and the variable cost is $33.50 per unit. The companys fixed expense is $130,000 per month. What is the companys contribution margin ratio?

16.5%

33.0%

49.5%

56.0%

8.

Parker Company has provided the following data for the most recent year: net operating income, $53,500; fixed expense, $89,000; sales, $190,000; and CM ratio, 75%. What is the companys total contribution margin?

$161,000

$101,000

$142,500

$190,000

9.

Redford, Inc. has provided the following data:

Selling Price	$120 per unit
Sales	5,200 units
Fixed expenses	$220,000
Variable cost	$60 per unit

If the dollar contribution margin per unit is increased by 10%, total fixed expenses is decreased by 20%, and all other factors remain the same, net operating income will:

decrease by $31,200.

increase by $75,200.

increase by $31,200.

decrease by $75,200.

10.

Marino Company is currently selling 10,000 units of its product per month at $10.50 per unit for total monthly sales of $105,000. The companys variable expenses are $4.25 per unit and its monthly fixed expenses total $10,500. An increase in the advertising budget of $4,500 is expected to increase its monthly sales by 1,000 units for total monthly sales of $115,500. This proposal will cause net operating income to:

Decrease by $6,250.

Increase by $1,750.

Increase by $4,500.

Decrease by $1,750.

11.

Lester Company has a single product. The selling price is $50 and the variable cost is $31.50 per unit. The companys fixed expense is $170,000 per month. How many units would the company have to sell to attain target profits of $55,700?

12,200 units

11,689 units

12,522 units

9,189 units

12.

Astair, Inc. reported sales of $6,975,000 for the month and incurred variable expenses totaling $5,100,000 and fixed expenses totaling $1,190,000. The company has no beginning or ending inventories. A total of 75,000 units were produced and sold last month. How many units would the company have to sell to achieve a desired profit of $885,000?

99,668 units

83,000 units

143,000 units

93,000 units

13.

Lester Company has a single product. The selling price is $50 and the variable cost is $34.00 per unit. The companys fixed expense is $134,400 per month. What is the companys break-even in sales dollars?

$134,400

$268,800

$22,400

$420,000

14.

Assume that Dollar-town Toys has fixed costs of $143,390. Each unit generates variable costs of $.35 and sells for $1.00. What is the break-even point in units?

303,886 units

106,215 units

220,600 units

85,675 units

15.

Parker Company has provided the following data for the most recent year: net operating income, $30,550; fixed expense, $95,550; sales, $194,000; and CM ratio, 65%. The companys margin of safety in dollars is:

$74,000.

$147,000.

$47,000.

$27,000.

16.

Parker Company has provided the following data for the most recent year: net operating income, $37,050; fixed expense, $102,050; sales, $214,000; and CM ratio, 65%. The margin of safety in percentage form is: (Round your answer to 2 decimal places.)

17.29%.

26.64%.

43.93%.

73.36%.

17.

Parker Company has provided the following data for the most recent year: net operating income, $33,000; fixed expense, $94,200; sales, $212,000; and CM ratio, 60%.What is the companys degree of operating leverage? (Round your answer to 2 decimal places.)

3.85

1.35

0.26

0.60

18.

If sales increase from $320,000 to $357,440, and if the degree of operating leverage is 5.20, net operating income should increase by: (Do not round your intermediate calculations and round your final answer to 2 decimal places.)

52.84%.

35.84%.

11.70%.

60.84%.

20.

Herman Corp. has two products, A and B, with the following total sales and total variable costs:

	Product A			Product B
Sales	$	6,500		$	23,000
Variable expenses	$	4,140		$	20,640

What is the overall contribution margin ratio?

84%

10%

16%

36%