INCLUDE SOLUTIONS

1. Junsin Corporation's budget for next year appears below. The budget assumes the company will sell 30,000 units.

Sales			600,000
Less: Costs
VC	390,000
FC	140,000		530,000
NOI			70,000

1.a) The company's contribution margin ratio _______.

a. 35%

b. 0.35%

c. 0.65%

d. 65%

1.b) The company's variable cost ratio _______.

a. 65%

b. 35%

c. 0.65%

d. 0.35%

1.c) The company's margin of safety as a percentage of sales is ________ .

a. 33%

b. 50%

c. 12%

d. 67%

1.d.) The company's break-even point in annual sales pesos is ____________ .

a. 530,000

b. 460,000

c. 350,000

d. 400,000

2. Maxwell Company has a total expense of 40,950 at the 21,000 level of activity and a total expense of 32,000 at the 16,000 unit level of activity.

The best estimate of the fixed cost for Maxwell Company is ______________ .

a. 3,360

b. 32,000

c. 29,190

d. 40,950