1. Swanson Company has two divisions; Sporting Goods and Sports Gear. The sales mix is 65% for Sporting Goods and 35% for Sports Gear. Swanson incurs $4,440,000 in fixed costs. The contribution margin ratio for Sporting Goods is 30%, while for Sports Gear it is 50%. The break-even point in dollars is

A. $1,642,800 B. $12,000,000 C. $11,100,000 D. $10,325,582

2. The degree of operating leverage:

A .

is computed by dividing total contribution margin by net income. B. Cannot be used to compare companies C. does not provide a reliable measure of a company's earnings volatility D. measures how much of each sales dollar is available to cover fixed expenses

3. If a division manager's compensation is based upon the division's net income, the manager may decide to meet the net income targets by increasing production when using

A.

variable costing, in order to increase net income. B. variable costing, in order to decrease net income. C. absorption costing, in order to increase net income. D. Absorption costing, in order to decrease net income.

4. Nielson Corp. sells its product for $8,800 per unit. Variable costs per unit are: manufacturing, $4,800, and selling and administrative, $100. Fixed costs are: $24,000 manufacturing overhead, and $32,000 selling and administrative. There was no beginning inventory at 1/1/12. Production was 20 units per year in 2012