13 If a company has variable costs of $40 per unit, fixed costs of $3,000 per month and sells its product for $50, how many units must it sell to break even a 300 b 250 c 100 d 50 14 A company produces two products, A and B A sells for $16 and has variable costs of $10 B sells for $12 and has variable costs of $8 Fixed Costs for the period are $35,000 Normally four units of A are sold for every two units of B units How many units of B must be sold if the company expects profits of $50,000 a 15,947 b 10,637 c 5,313 d Cannot be determined 15 What does sensitivity analysis refers to a control b what if situations c variable costs only d fixed costs only Cheesy Company The Company is considering the introduction of a new product with the following price and cost characteristics Sales price $150 each Variable cost $60 each Fixed cost $135,000 per year The company expects to sell 2,000 units for the year 16 Refer Cheesy Company How many units must be sold to break even a 900 b 2,250 c 2,000 d 1,500 17 What effect could an increase (investment) in fixed costs have on the break even point and the contribution margin Break even Point Contribution Margin a Increase Increase b Increase Decrease c Decrease Increase d Decrease Decrease 18 Calculate margin of safety using the following assumptions Sales Price per unit $500 Variable cost per unit $300 Fixed Costs in total $200,000 Actual Sales Volume 1,750 units a 1,000 units b $500,000 c 1,750 units d 750 units 19 Which of the following is a typical cost structure for home builders a high fixed costs relative to variable costs b high variable costs relative to fixed costs c high profits relative to total costs d None of the answers is correct 20 Which of the following is the major assumption as to cost and revenue behavior underlying conventional cost volume profit calculations a variability of fixed costs b variability of unit prices and efficiency c curvilinearity of relationships d linearity of relationships

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13. If a company has variable costs of $40 per unit, fixed costs of $3,000 per month and sells its product for $50, how many

13. If a company has variable costs of $40 per unit, fixed costs of $3,000 per month and sells its product for $50, how many units must it sell to break-even?

a.	300
b.	250
c.	100
d.	50

14. A company produces two products, A and B. A sells for $16 and has variable costs of $10. B sells for $12 and has variable costs of $8. Fixed Costs for the period are $35,000. Normally four units of A are sold for every two units of B units. How many units of B must be sold if the company expects profits of $50,000?

a.	15,947
b.	10,637
c.	5,313
d.	Cannot be determined

15. What does sensitivity analysis refers to?

a.	control.
b.	what-if situations.
c.	variable costs only.
d.	fixed costs only.

Cheesy Company

The Company is considering the introduction of a new product with the following price and cost characteristics

Sales price	$150 each
Variable cost	$60 each
Fixed cost	$135,000 per year

The company expects to sell 2,000 units for the year.

16. Refer Cheesy Company. How many units must be sold to break even?

a.	900
b.	2,250
c.	2,000
d.	1,500

17. What effect could an increase (investment) in fixed costs have on the break-even point and the contribution margin?

Break-even Point Contribution Margin

a.	Increase Increase
b.	Increase Decrease
c.	Decrease Increase
d.	Decrease Decrease

18. Calculate margin of safety using the following assumptions:

Sales Price per unit	$500
Variable cost per unit	$300
Fixed Costs in total	$200,000
Actual Sales Volume	1,750 units

a.	1,000 units
b.	$500,000
c.	1,750 units
d.	750 units

19. Which of the following is a typical cost structure for home builders?

a.	high fixed costs relative to variable costs.
b.	high variable costs relative to fixed costs.
c.	high profits relative to total costs.
d.	None of the answers is correct.