Part 1:

Kanmore produces and sells three products. Last month's results are as follows:

	P1		P2		P3
Revenues	$	109,000	$	218,000	$	218,000
Variable costs		27,250		152,600		54,500

Fixed costs total $170,000. What sales volume would generate an operating profit of $240,000? (Assume the current product mix.)

$298,246.

$545,000.

$719,298.

$375,000.

Part 2:

A company has provided the following data:

Sales		4,000	Units
Sales price	$	75	per unit
Variable cost	$	51	per unit
Fixed cost	$	30,000

If the sales volume decreases by 25%, the variable cost per unit increases by 20%, and all other factors remain the same, operating profit will (Do not round your intermediate calculations.):

decrease by $54,600.

decrease by $20,400.

increase by $75,000.

decrease by $11,400.

Part 3:

In a decision analysis situation, which one of the following costs is not likely to contain a variable cost component? (CMA adapted)

Labor.

Overhead.

Straight-line Depreciation.

Selling.

Material.