Case 1: In a business, the contribution margin per unit of its product is $10, variable cost per unit is $15 and the break-even point is 13,700 units.

Based on the above, what are the fixed costs associated with the business? *

$137,000

$68,500

$205,500

None of the above

Based on the above, what is the contribution margin ratio? *

50%

40%

66%

None of the above

Case 2: Loulia makes cupcakes, which sell for $5 each and which cost $3 each to make. The owner estimates that her fixed costs amount to approximately $1,000 per week.

Based on the above, how many cupcakes must Loulia sell in a week in order to break-even? *

200 units

500 units

125 units

None of the above

Based on the above, what level of sales must she achieve every week in order to break-even? *

$1,500

$2,500

$1,000

None of the above

Case 3: Lake Sales had $1,800,000 in sales last month. The contribution margin ratio was 40% and Net Income was $155,000. What is Lake's break-even sales volume? *

$1,080,000

$1,412,500

$720,000

None of the above