1) Weatherspoon Company has a product with a selling price per unit of $200, the unit variable cost is $110, and the total monthly fixed costs are $300,000. How much is Weatherspoons contribution margin per unit?

a. $ 90 b. $110 c. $200 d. $300

2) An Italian bakery on Franklin Avenue in Hartford is famous for its cakes. The bakery sells its cakes for $19.95 to the public. The cost for the ingredients and labor to make the cake are $8.45 per cake, and the fixed costs for the bakery for one month are $8,050.

a) Assuming that this bakery only sells cakes, what is the break-even point in number of cakes?

b) This bakery sells 1,500 cakes for the month of April. What is the expected net income?

3) Lotz Painting Company has the following production data for March:

Beginning work in process, 0 units

Units transferred out, 42,000

Units in ending work in process, 10,000, which are 80% complete for conversion costs

Materials are added only at the beginning of the process.

Instructions

Compute equivalent units of production for both materials and conversion costs.