1.

Payton Industries has fixed costs of $490,000, the unit selling price is $35, and the unit variable costs are $20. What is the break-even sales (units) if fixed costs are reduced by $40,000?

	a.	32,667 units
	b.	14,000 units
	c.	24,500 units
	d.	30,000 units

2.

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:

	Unit Selling Price	Unit Variable	Unit Contribution
Product	Price	Cost	Margin
X	$110.00	$70.00	$40.00
Y	70.00	50.00	20.00

What was Rusty Co.s weighted average unit contribution margin?

	a.	$20.00
	b.	$22.50
	c.	$60.00
	d.	$40.00

3.

Charlotte Co. has budgeted salary increases to factory supervisors totaling 9%. If selling prices and all other cost relationships are held constant, next year's break-even point

	a.	cannot be determined from the data given
	b.	will increase by 9%
	c.	will decrease by 9%
	d.	will increase at a rate greater than 9%

4.

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

Unit selling price	$250
Unit variable cost	100
Total fixed costs	$840,000

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 800 units
	b.	increased by 640 units
	c.	increased by 400 units
	d.	decreased by 640 units

5.

Given the following cost and activity observations for Bounty Companys utilities, use the high-low method to calculate Bounty variable utilities costs per machine hour. Round your answer to the nearest cent.

	Cost	Machine Hours
March	$3,100	15,000
April	2,700	10,000
May	2,900	12,000
June	3,600	18,000

	a.	$10.00
	b.	$0.11
	c.	$0.63
	d.	$0.67

6.

Costs that remain constant in total dollar amount as the level of activity changes are called

	a.	variable costs
	b.	mixed costs
	c.	product costs
	d.	fixed costs

7.

Lee Industry sales are $525,000, variable costs are 53% of sales, and operating income is $19,000. What is the contribution margin ratio?

	a.	47%
	b.	26.5%
	c.	53%
	d.	9.5%

8.

If Kaden Company's fixed costs are $46,800, the unit selling price is $42, and the unit variable costs are $24. What is the break-even sales (units)?

	a.	1,950
	b.	1,114
	c.	2,400
	d.	2,600

9.

Contribution margin is

	a.	the same as sales revenue
	b.	the excess of sales revenue over variable cost
	c.	another term for volume in the "cost-volume-profit" analysis
	d.	profit