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Question 46 (7 points) Austin Company's high and low level of activity last year was 60,000 units of product produced in March and 20,000 units produced in August. Machine maintenance costs were $156,000 in March and $60,000 in August. Using the high- low method, determine an estimate of total maintenance cost for a month in which production is expected to be 45,000 units. 1) $120,000 2) $135,000 3) $144,000 4) $117,000 Question 47 (7 points) Fairmount Manufacturing's variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $55,000. If sales are expected to increase $100,000, by how much will the company's net income increase? 1) $45,000 2) $15,000 3) $30,000 4) $70,000 Question 48 (3 points) Listen If the activity level increases 10%, total variable costs will 1) remain the same. O2) increase by more than 10%. 3) decrease by less than 10%. 4) increase 10%. Question 49 (3 points) Listen Contribution margin 1) is always the same as gross profit margin. O2) excludes variable selling costs from its calculation. O3) is calculated by subtracting total manufacturing costs per unit from sales revenue per unit. O 4) equals sales revenue minus variable costs. Question 50 (3 points) 10 Listen The equation which teflects a CVP income statement is a 1) Sales - Cost of goods sold + Operating expenses + Net income. 2) Sales + Fixed costs = Variable costs + Net income. 3) Sales - Variable costs + Fixed costs = Net income. 4) Sales - Variable costs - Fixed costs = Net income