Question
If fixed costs are $200,000 and variable costs are 60% of the selling price, the break-even point in sales dollars is: a. $800,000 b. $333,333
If fixed costs are $200,000 and variable costs are 60% of the selling price, the break-even point in sales dollars is:
a. $800,000
b. $333,333
c. $200,000
d. $500,000
Division B has a divisional contribution of $250,000. After the allocation of $180,000 of common costs, it is making a profit of $70,000. Assuming all other factors are equal, if the division were closed, the effect on the overall profit of the organisation would be:
a. a decrease of $180,000.
b. a decrease of $250,000.
c. an increase of $70,000.
d. an increase of $180,000.
Assume Clean Motors Ltd manufactures only one component for the motor vehicle industry. In one year the company produced 25,000 units of the component of which 22,000 units were sold. The following costs were recorded for that year: Direct material $750,000 Direct labour 450,000 Manufacturing overhead 300,000 Administrative expenses 84,000 If there were 5,000 units in beginning inventory, calculate the cost of sales for Clean Motors Ltd for that year. Assume input prices have not changed from last year.
a. $1,620,000
b. $1,800,000
c. $1,500,000
d. $1,320,000
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