10. Once sales reach the break-even point, each additional unit sold will: increase fixed cost by a proportionate amount a. b. reduce the margin of safety. increase the company's operating leverage. d. c. increase profit by an amount equal to the per unit contribution margin 11. M and M, Inc. produces a product that has a variable cost of $3.00 per unit. The company's fixed costs are $30,000. The product is sold for $5.00 per unit and the company desires to earn a target profit of $20,000. What is the amount of sales that will be necessary to earn the desired profit? a. $75,000 b. $50,000 c. $83,333 d. $125,000 Use the following information for Falcon Corporation to answer the next four questions: Sales price per unit Variable cost per unit Average production Total fixed costs $190 $80 1,500 units per month $55,000 per month 12. What is Falcon's contribution margin per unit? a. $80 b. $110 c. $190 d. $270 13. Ilow many units must Falcon sell each month to break even? a. 500 b. 1000 c. 1500 d. 2000 14. What amount of sales in dollars must Falcon achieve each month in order to break even? $95,000 h. $190,000 c. $285,000 a d. $380,000 l a 15. Ilow many units per month must Falcon sell in order to make a $1 10,000 profit? 500 al h. 1,000 c. 1,500 d. 2,000 16. Costs that can be traced to objects in a cost-effective manner are called allocated costs. a b. conversion costs c. d. indirect costs direct costs. 17. Which of the following is the most logical cost driver for allocating the telephone bill among four departments square footage of floor space h. direct labor hours c. telephone usage in minutes d. sales volume measured in dollars a. 18. Alpha Company is selecting a cost driver to use in allocating utilities costs to its departments. The best cost driver has a strong cause-and-effect relationship to the cost heing allocated. b. is one for which information is readily available. seems acceptable and reasonable to the managers of the departments. c. d. all of the above