Corey Company has a margin of safety percentage of 20%. The break-even point is $250,000 and the variable costs are 40% of sales. Given this information, the operating profit is:

$37,500 $20,000 $25,000 $30,000

CraftMaster Corporation purchased a machine 7 years ago for $354,000 when it launched product X05K. Unfortunately, this machine has broken down and cannot be repaired. The machine could be replaced by a new model 360 machine costing $398,000 or by a new model 280 machine costing $348,000. Management has decided to buy the model 280 machine. It has less capacity than the model 360 machine, but its capacity is sufficient to continue making product X05K. Management also considered, but rejected, the alternative of dropping product X05K and not replacing the old machine. If that were done, the $348,000 invested in the new machine could instead have been invested in a project that would have returned a total of $442,000. In making the decision to buy the model 280 machine rather than the model 360 machine, the differential cost was: $50,000. $88,000. $6,000. $44,000.

The Arthur Company manufactures kitchen utensils. The company is currently producing well below its full capacity. The Benton Company has approached Arthur with an offer to buy 13,000 utensils at $0.80 each. Arthur sells its utensils wholesale for $0.90 each; the average cost per unit is $0.87, of which $0.12 is fixed costs. If Arthur were to accept Benton's offer, what would be the increase in Arthur's operating profits?

$390. $650. $910. $1,300.

The Crater Manufacturing Company recorded overhead costs of $14,312 at an activity level of 4,850 machine hours and $8,020 at 2,430 machine hours. The records also indicated that overhead of $9,795 was incurred at 2,730 machine hours. What is the variable cost per machine hour using the high-low method to estimate the cost equation?

$2.13. $2.60. $3.59. $2.95.

Geno's Body Shop had sales revenues and operating costs in 2016 of $730,000 and $565,000, respectively. In 2017, Geno's plans to expand the services it provides to customers to include detailing services. Revenues are expected to increase by $101,000 and operating costs by $58,000 as a result of this expansion. Assuming that there are no changes to the existing body shop business, operating profits would be expected to increase during 2017 by

$165,000. $101,000. $208,000. $43,000.

Ballard Company incurred a total cost of $9,200 to produce 500 units of pulp. Each unit of pulp required four (4) direct labor hours to complete. What is the total fixed cost if the variable cost was $1.40 per direct labor hour?

$2,900. $2,800. $6,400. $8,500.