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Question 6 XYZ Inc. sells a single product for $20 per unit. Variable production costs are $4 per unit. Fixed overhead costs amount $10,000 per

Question 6

XYZ Inc. sells a single product for $20 per unit. Variable production costs are $4 per unit. Fixed overhead costs amount $10,000 per month. Variable selling costs are $4 per unit. Fixed selling costs are $5,000 per month. Last month, the company produced 10,000 units and sold 8,000 units. By how much would the company's net operating income increase if selling price was increased by $5 per unit? Assume no change in sales volume.

a.

$8,000

b.

$20,000

c.

$40,000

d.

$12,000

Question 7

XYZ Inc. sells a single product for $10 per unit. Variable production costs are $7 per unit. Fixed overhead costs amount $10,000 per month. Variable selling costs are $1 per unit. Fixed selling costs are $5,000 per month. Last month, the company produced 10,000 units and sold 8,000 units. What is ABC's contribution margin per unit?

a.

$5

b.

$2

c.

$10

d.

$6

Question 8

XYZ Inc. sells a single product for $30 per unit. Variable production costs are $18 per unit. Fixed overhead costs amount $50,000 per month. Variable selling costs are $4 per unit. Fixed selling costs are $30,000 per month. Last month, the company produced 10,000 units and sold 8,000 units. How many units must the company sell to achieve a pre-tax profit of $480,000?

a.

$20,000

b.

$26,667

c.

$30,000

d.

$70,000

Question 9

XYZ Inc. sells a single product for $25 per unit. Variable production costs are $10 per unit. Fixed overhead costs amount $10,000 per month. Variable selling costs are $5 per unit. Fixed selling costs are $5,000 per month. Last month, the company produced 10,000 units and sold 8,000 units. What is ABC's contribution margin ratio?

a.

30%

b.

50%

c.

10%

d.

40%

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