3. ABC Company's sales were $240,000 for 2016. Fixed costs were $80,000 and variable costs were $180,000. What was the contribution margin ratio?

A. 75%

B. 50%

C. 33%

D. 25%

4. Wendy Company is considering the purchase of a $20,000 machine, assuming an estimated five-year useful life, an expected cash inflow of $5,000 annually, and a 12% cost of capital. What is the profitability index (to the nearest 2 places)?

A. 0.25

B. 0.71

C. 0.90

D. 1.25

6. A company with fixed costs of $120,000 produces a product with variable costs of $16 per unit and a selling price of $24. What amount of sales would be required for a net income of $60,000?

A. $220,000

B. $240,000

C. $300,000

D. $540,000

7. A company has fixed costs of $30,000 making a product that sells for $40 and has a variable cost of $16. What is the break-even point in dollars?

A. $ 30,000

B. $ 50,000

C. $ 60,000

D. $100,000

13. Information on the Glenn Company's direct labor costs for the month of July is as follows:

Standard direct labor-hours...................... 66,000

Actual direct labor-hours.......................... 70,000

Standard direct labor rate per hour........... $ 6.60

Total payroll........................................... $490,000

What was Glenn's labor efficiency variance?

A. $28,000 (favorable)

B. $28,000 (unfavorable)

C. $26,400 (favorable)

D. $26,400 (unfavorable)