Question
Kennedy, Inc. sells its product for $40. The variable costs are $18 per unit. Fixed costs are $16,000. The company is considering the purchase
Kennedy, Inc. sells its product for $40. The variable costs are $18 per unit. Fixed costs are $16,000. The company is considering the purchase of an automated machine that will result in a $2 reduction in unit variable costs and an increase of $5,000 in fixed costs. Which of the following is true about the break even point in units? Select one: OA. It will remain unchanged. OB. It will decrease OC. It will increase OD. It cannot be determined from the information provided. In a sales mix situation, at any level of units sold, net income will be higher if Select one: O A. more higher contribution margin units are sold than lower contribution margin units. OB. weighted average unit contribution margin decreases OC. more fixed expenses are incurred. OD. more lower contribution margin units are sold than higher contribution margin units. Ramirez Corporation sells two types of computer hard drives. The sales mix is 30% (Q-Drive) and 70% (Q-Drive Plus). Q-Drive has a contribution margin per unit of $60. Q-Drive Plus has variable costs per unit of $90. Ramirez's fixed costs are $891,000. How many units of Q Drive would be sold at the break even point? (Hint: First, first figure out total break even units, then multiple it by the percentage of each specific product). Select one O A. 4455 OB. 7,700 OC. 11,000 OD. 3,300 If Kola, Inc. sells two products with a sales mix of 75%: 25%, and the respective contribution margins are $80 and $240, then weighted average unit contribution margin is $120. Select one True False it a company has limited machine hours available for production, it is generally more profitable to produce and sell the product with the highest contribution margin per machine hour. Select one O True O False
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