1. In which of the following situations is absorption costing more useful than variable costing for decision making?

a. setting long-term prices

b. planning short-term production

c. controlling costs

d. analyzing market segments

2. Sales mix is sometimes referred to as the

a. profitability mix.

b. product mix.

c. quantity factor.

d. contribution margin.

3. Based on the following data for Scout Company, determine the contribution margin. Sales are 1,500 units, sales price is $7, variable costs are $3.25 per unit, and fixed costs total $3,000.

4. Discount Airlines is preparing a contribution margin report segmented by route. The following information is available:

	Atlanta/ New York	Miami/LA	New York/ Chicago
Average ticket price per passenger	$900	$1,250	$750
Total passengers served	8,800	7,100	10,200
Total miles flown	121,000	190,000	95,000

The variable costs per unit are as follows:

Food/beverage service	$7 per passenger
Selling	$90 per passenger
Fuel	$15 per mile
Wages	$20 per mile

What is the contribution margin ratio for the Miami/LA route (to the closest tenth of a percent)?