Markham Company has a contribution margin ratio of 25%. The company is considering a proposal that will increase sales by $150,000. What increase in profit can be expected assuming total fixed costs increase by $25,000? (Do not round your intermediate calculations.)

$6,250

$31,250

$37,500

$12,500

A product has a contribution margin of $2.50 per unit and a selling price of $25 per unit. Fixed costs are $20,000. Assuming new technology increases the unit contribution margin by 50 percent but increases total fixed costs by $13,750, what is the new breakeven point in units?

3,667 units

3,333 units

13,500 units

9,000 units

Which of the following software applications is most useful for performing cost-volume-profit sensitivity analysis?

Database software

Spreadsheet software

Presentation software

Word processing software

To get a feel for the impact on profits of various changes in costs and volume levels management should perform:

cost benefit analysis.

sensitivity analysis.

cost analysis.

profitability analysis.