A companys product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin ratio? *

40%

60%

90%

None of the above

Company A wants to earn $5,000 profit in the month of January. If their fixed costs are $10,000 and their product has a per-unit contribution margin of $250, how many units must they sell to reach their target income? *

20 units

40 units

60 units

None of the above

________ are the costs associated with not choosing the other alternative. *

Sunk costs

Opportunity costs

Unavoidable costs

None of the above

When should a segment be dropped? *

Only when the decrease in total contribution margin is less than the decrease in fixed cost

Only when the decrease in total contribution margin is equal to fixed cost

Only when the increase in total contribution margin is more than the decrease in fixed cost

None of the above

Youngstown Construction plans to discontinue its roofing segment. Last year, this segment generated a contribution margin of $65,000 and incurred $70,000 in fixed costs. Discontinuing the segment will allow the company to avoid half of the fixed costs. What effect is expected to occur to the companys overall profit? *

Decrease of $5,000

Decrease of $30,000

Increase of $30,000

None of the above

Which of the following are assumptions for break-even analysis? * A) Elements of cost cannot be divided in different groups. B) Fixed cost remains certain from zero production to full capacity. C) Behavior of different costs is linear D) Selling per price unit remains constant. A, B, C B, C, D O A,C,D O None of the above