1) Marigold reported the following results from the sale of 5000 units in May: sales $420000, variable costs $300000, fixed costs $90000, and net income $30000. Assume that Marigold increases the selling price by 5% on June 1. How many units will have to be sold in June to maintain the same level of net income?

4255.

4750.

4750.

5000.

2)Sheridan Company produces flash drives for computers, which it sells for $40 each. Each flash drive costs $5 of variable costs to make. During April, 500 drives were sold. Fixed costs for April were $2000. How much does Sheridans operating income increase for each $1600 increase in revenue per month?

Not enough information to determine the answer.

$1400.

$20000.

$1600.

3)Gant Accounting performs two types of services, Audit and Tax. Gants overhead costs consist of computer support, $279000; and legal support, $139500. Information on the two services is:

	Audit	Tax
Direct labor cost	$50000	$100000
CPU minutes	40000	10000
Legal hours used	200	800

Overhead applied to tax services using traditional costing is

$251100.

$139500.

$279000.

$167400.

4)In the Bramble, maintenance costs are a mixed cost. At the low level of activity (120 direct labor hours), maintenance costs are $1500. At the high level of activity (200 direct labor hours), maintenance costs are $2200. Using the high-low method, what is the variable maintenance cost per unit and the total fixed maintenance cost?

Variable Cost Per Unit

Total Fixed Cost

$11.00

$300

$8.75

$450

$8.75

$700

$11.00

$660

5)Marigold Corp. sells 110000 wrenches for $24 per unit. Fixed costs are $700000 and net income is $400000. What should be reported as variable expenses in the CVP income statement?

$1540000

$2240000

$1386000

$1940000

6)Hartley Company produces two products, Flower and Planter. Flower is a high-volume item totaling 20000 units annually. Planter is a low-volume item totaling only 6000 units per year. Flower requires 1 hour of direct labor for completion, while each unit of Planter requires 2 hours. Therefore, total annual direct labor hours are 32000 (20000 + 12000). Expected annual manufacturing overhead costs are $720000. Hartley uses a traditional costing system and assigns overhead based on direct labor hours. Each unit of Planter would be assigned overhead of

$27.69.

$45.00.

$22.50.

need more information to compute.