Chapter 18 A firm operated at 80% of capacity for the past year, during which fixed costs were $197,000, variable costs were 67% of sales, and sales were $1,096,000. Operating profit was a. $131,744 b. $734,320 c. $361,680 d. $164,680 Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to calculate Bounty' variable utilities costs per machine hour. Round your answer to the nearest cent. Cost Machine Hours March $3,144 14,702 April 2,636 9,675 May 2,885 12,312 June 3,844 18,334 a.$0.98 b.$1.67 c.$0.94 d.$0.14 Costs that vary in total in direct proportion to changes in an activity level are called a. sunk costs b. differential costs c. variable costs d. fixed costs When a business sells more than one product at varying selling prices, the business's break-even point can be determined as long as the number of products does not exceed a. fifteen b. two c. three d. there is no limit Rusty Co. sells two products, X and Y. Last year, Rusty sold 5,000 units of X and 35,000 units of Y. Related data are: Unit Selling Unit Variable Unit Contribution Product Price Cost Margin X $110.00 $70.00 $40.00 Y 70.00 50.00 20.00 What was Rusty Co.'s sales mix last year? a.58% X, 42% Y b.12.5% X, 87.5% Y c.60% X, 40% Y d.30% X, 70% Y As production increases, variable costs per unit a. stay the same b. increase c. decrease d. either increase or decrease, depending on the fixed costs Given the following cost and activity observations for Bounty Company's utilities, use the high-low method to calculate Bounty' variable utilities costs per machine hour. Round your answer to the nearest cent. Cost Machine Hours March $3,100 15,000 April 2,700 10,000 May 2,900 12,000 June 3,600 18,000 a.$10.00 b.$0.67 c.$0.11 d.$0.63 Spice Inc.'s unit selling price is $54, the unit variable costs are $36, fixed costs are $109,000, and current sales are 10,900 units. How much will operating income change if sales increase by 5,400 units? a.$196,200 increase b.$293,400 increase c.$196,200 decrease d.$97,200 increase Timmer Corporation just started business in January. There were no beginning inventories. During the year, it manufactured 12,000 units of product, and sold 10,000 units. The selling price of each unit was $20. Variable manufacturing costs were $4 per unit, and variable selling and administrative costs were $2 per unit. Fixed manufacturing costs were $24,000, and fixed selling and administrative costs were $6,000. What would Timmer's net income be for the year using absorption costing? a.$4,000 b.$110,000 c.$106,000 d.$114,000 O'Boyle Co.'s fixed costs are $256,000, the unit selling price is $36, and the unit variable costs are $20, what is the break-even sales (units)? a. 12,800 units b. 7,111 units c. 16,000 units d. 4,571 units