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1. If fixed costs are $830,000 and variable costs are 69% of sales, the break-even point in sales dollars is a.$2,677,419 b.$3,507,419 c.$572,700 d.$1,402,700 3.

1. If fixed costs are $830,000 and variable costs are 69% of sales, the break-even point in sales dollars is

a.$2,677,419

b.$3,507,419

c.$572,700

d.$1,402,700

3. If fixed costs are $1,356,000, the unit selling price is $235, and the unit variable costs are $103, the amount of sales (units) required to realize an operating income of $251,000 is

a.13,165 units

b.5,770 units

c.12,174 units

d.2,437 units

4. If fixed costs are $561,000 and the unit contribution margin is $8.00, the break-even point in units if variable costs are decreased by $0.50 per unit is

a.74,800 units

b.60,000 units

c.66,000 units

d.70,125 units

6. Flying Cloud Co. has the following operating data for its manufacturing operations:

Unit selling price $241
Unit variable cost $110
Total fixed costs $802,000

The company has decided to increase the wages of hourly workers which will increase the unit variable cost by 10%. Increases in the salaries of factory supervisors and property taxes for the factory will increase fixed costs by 4%. If sales prices are held constant, the next break-even point for Flying Cloud Co. will be

a.increased by 829 units

b.decreased by 829 units

c.increased by 663 units

d.increased by 994 units

7. If fixed costs are $500,000 and the unit contribution margin is $20, the break-even point in units if fixed costs are reduced by $80,000 is

a.25,000 units

b.4,000 units

c.21,000 units

d.29,000 units

8. Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows:

Product Unit Selling Price Unit Variable Cost Unit Contribution Margin
X $110 $70 $40
Y 70 50 20

Assuming that last year's fixed costs totaled $675,000, Rusty Co.'s break-even point in units was

a.30,000 units

b.30,100 units

c.11,250 units

d.16,875 units

9. Carter Co. sells two products: Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are as follows:

Product Unit Selling Price Unit Variable Cost Unit Contribution Margin
Arks $120 $80 $40
Bins 80 60 20

Assuming that last year's fixed costs totaled $960,000, Carter Co.'s break-even point in units was

a.28,000 units

b.40,000 units

c.35,000 units

d.12,000 units

10. Given the following cost and activity observations for Smithson Company's utilities, use the high-low method to determine Smithson's fixed costs per month. Round your final answer to the nearest dollar. Do not round interim calculations.

Cost Machine Hours
January $26,400 10,500
February 36,300 18,500
March 28,000 12,500
April 31,400 14,900

a.$13,406

b.$10,725

c.$42,899

d.$22,790

11. Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows:

Product Unit Selling Price Unit Variable Cost Unit Contribution Margin
X $110 $70 $40
Y 70 50 20

For break-even analysis, the unit variable cost of E was

a.$70.00

b.$120.00

c.$52.50

d.$50.00

13. Carter Co. sells two products: Arks and Bins. Last year, Carter sold 14,000 units of Arks and 56,000 units of Bins. Related data are as follows:

Product Unit Selling Price Unit Variable Cost Unit Contribution Margin
Arks $120 $80 $40
Bins 80 60 20

Carter Co.'s unit contribution margin of E was

a.$60

b.$24

c.$92

d.$20

14. If a business had sales of $3,715,000 and a margin of safety of 20%, the break-even point was

a.$2,972,000

b.$4,458,000

c.$6,687,000

d.$743,000

15. Rusty Co. sells two products: X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are as follows:

Product Unit Selling Price Unit Variable Cost Unit Contribution Margin
X $110 $70 $40
Y 70 50 20

For break-even analysis, the unit contribution margin of E was

a.$22.50

b.$20.00

c.$40.00

d.$60.00

16. If fixed costs are $850,000 and variable costs are 60% of sales, the break-even point (dollars) is

a.$1,416,666

b.$3,400,000

c.$2,125,000

d.$340,000

17. If fixed costs are $600,000 and the unit contribution margin is $40, the break-even point if fixed costs are increased by $90,000 is

a.15,000 units

b.8,333 units

c.17,250 units

d.9,667 units

19. Beemer's sales are $400,000, variable costs are 75% of sales, and operating income is $50,000. The operating leverage is

a.2.0

b.2.5

c.7.5

d.0

20. Question Content Area

Given the following cost and activity observations for George Company's utilities, use the high-low method to determine George's variable utilities cost per machine hour.

Cost Machine Hours
May $16,500 105,000
June 18,000 120,000
July 16,000 100,000
August 17,500 117,000

a.$100.00

b.$10.00

c.$1.00

d.$0.10

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