1 .Wu Company incurred $40,000 of fixed cost and $50,000 of variable cost when 4,000 units of product were made and sold. If the company's volume doubles, the company's total cost will:

stay the same.

double as well.

increase but will not double.

decrease.

2 .Hard Nails and Bright Nails are competing nail salons. Both companies have the same number of customers. Both charge the same price for a manicure. The only difference is that Hard Nails pays its manicurists on a salary basis (i.e., a fixed cost structure) while Bright Nails pays its manicurists on the basis of the number of customers they serve (i.e., a variable cost structure). Both companies currently make the same amount of net income. If sales of both salons increase by an equal amount, Hard Nails:

will earn a higher profit than Bright Nails.

will earn a lower profit than Bright Nails.

will earn the same amount of profit as Bright Nails.

The answer cannot be determined from the information provided.

3 The excess of a product's selling price over its variable costs is referred to as:

gross profit

gross margin

contribution margin

manufacturing margin

manufacturing margin