QUESTION 11

Which of the following statements regarding fixed costs is incorrect?

		Expressing fixed costs on a per unit basis usually is the best approach for decision making.
		Fixed costs expressed on a per unit basis will decrease with increases in activity.
		Total fixed costs are constant within the relevant range.
		Fixed costs expressed on a per unit basis will increase with decreases in activity.

2.5 points

QUESTION 12

The following data are available for the Phelps Corporation for a recent month:

	Product A			Product B			Product C		Total
Sales	$	150,000		$	130,000		$	90,000	$	370,000
Variable expenses		91,000			104,000			27,000		222,000
Contribution margin	$	59,000		$	26,000		$	63,000		148,000
Fixed expenses										55,000
Net operating income									$	93,000

The break-even sales for the month for the company is closest to:

		$148,000
		$137,500
		$91,667
		$203,000