1) The Dean Company has sales of $500,000 and the break-even point in sales dollars of $300,000. Determine the company's margin of safety.

a) 45%

b) 43%

c) 40%

d) 55%

2) The Tom Company reports the following data. Determine Tom Company's operating leverage.

Sales $600,000

Variable costs $400,000

Fixed Costs $100,000

a) 2.0

b) 3.5

c) 4.2

d) 5.0

The manufacturing cost of Mocha Industries for three months of the year are provided below. Using the high-low method, determine a) variable cost per unit, b) the total fixed costs.

Total Cost Production

April $63,100 1,200 units

May 80,920 1,800

June 100,300 2,400

a) 44 and 52,000

b) 31 and 25,900

c) 20 and 30,000

d) 13 and 22,000