14. A product sells for $20 per unit and has a contribution margin ratio of 40%. Fixed expenses total $240,000 annually. How many units of the product must be sold to yield an operating income of $60,000? A. 37,500 units. B. 40,000 units. C. 65,000 units. D. 30,000 units. (240,000 + 60,000)/(20*.40)15. Kern Company prepared the following tentative budget for next year: Sales $500,000 Selling Price $5 per unit Variable Expenses $300,000 Fixed Expenses $150,000 The sales manager argues that the unit selling price could be increased by 20%, with an expected volume decrease of only 10%. If Kern incorporates these changes in its budget, what should be the budgeted operating income? A. $66,000. B. $90,000. SL$120,000. D. $145,000. New CM = 5*1.20 - 300,000/100,000 = $3/unit Budgeted operating income = 90,000*$3 - 150,000 16. For the most recent year, Atlantic Company's operating income computed using the absorption costing method was $7,400, and its operating income computed using the variable costing methodwas $10,100. The company's unit product cost was $17 under variable costing and $22 under absorption costing. Atlantic produces the same number of units each year. What must have been the beginning inventory if the ending inventory consisted of 1,460 units? A. 920 units. B. 1,460 units. C. 2,000 units. D. 12,700 units. ($10,100 + $7,300 - $7,400)/$5/unit