1. Which of the following is NOT an assumption of Cost-Volume-Profit analysis?

A. Inventory levels will change as production levels vary.

B. Managers can classify each cost as either variable or fixed, and mixed costs can be broken down into their variable or fixed component.

C. Revenues are linear throughout the relevant range of volume.

D. A change in volume is the only factor that affects costs.

2. If the sales price is $20 per unit, the variable cost is $12 per unit, total fixed costs is $12,000, and 15,000 units are produced, the contribution margin per unit is:

A. $20.

B. $12.

C. $9.

D. $8.

3. If the sales price is $60 per unit, the variable cost is $10 per unit, total fixed costs is $60,000, and 12,000 units are produced, the breakeven in units is:

A. 1,200.

B. 1,000.

C. 240.

D. 200.

4. If the sales price is $150 per unit, the variable cost is $90 per unit, and total fixed costs is $24,000, the contribution margin ratio is:

A. 80%.

B. 60%.

C. 40%.

D. 20%.

5. If the sales price is $150 per unit, the variable cost is $90 per unit, and total fixed costs is $24,000, the breakeven in sales dollars is:

A. $15,000.

B. $24,000.

C. $36,000.

D. $60,000.

6. If the sales price is $60 per unit, the variable cost is $36 per unit, total fixed costs is $50,000, how many units need to be sold if the desired profit is $100,000?

A. 1,000 units

B. 2,500 units

C. 4,100 units

D. 6,250 units

10. Leverage Corporation sells two products: Regular and Supreme. Leverage sells three Regulars for every two Supremes. The Regular sells for $20 each with variable costs of $11 each, whereas the Supreme sells for $25 each with variable costs of $15 each. If fixed costs are $21,000, what is the breakeven point in units?

A. 1,167 units of each

B. 1,050 units of each

C. 1,340 units of Regular and 894 units of Supreme

D. 894 units of Regular and 1,340 units of Supreme