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Questions 10-12 utilize the following information regarding a product manufactured and sold by Skiffs' Co. is shown below: Maximum capacity with existing facilities Total
Questions 10-12 utilize the following information regarding a product manufactured and sold by Skiffs' Co. is shown below: Maximum capacity with existing facilities Total fixed costs per month Variable cost per unit. Sales price per unit. 10. The contribution margin ratio for this product is: A. 20%. C. 30%. B. 25%. D. 32%. 11. The number of units Skiffs' Co. must sell to break even is: (rounded) A. 3,927. B. 3,572. C. 3,000. D. 2,500. 6,000 units $100,000 $85.00 $125.00 12. The dollar sales volume necessary to produce monthly operating income of $28,000 before taxes is: A. $375,000. C. $410,000. B. $400,000. D. $428,000. 13. Which of the following costs is traceable to an individual sales department in a department store such as Kohls? A. Salaries of store security guards. B. Depreciation on the store building. C. Salary of a sales associate. D. Salary of the store manager. 14. The Sports Arena location of Pasta Heaven reports monthly sales of $300,000, variable costs of $165,000, and traceable fixed costs of $102,000. The contribution margin ratio of this business unit is: A. 70%. B. 45%. C. 55%. D. 16.4%. 15. The use of activity-based costing is most appropriate for: A. Firms that manufacture multiple product lines. B. Firms that have very low manufacturing overhead costs relative to other costs of production. C. Firms with high levels of production activity. D. Firms that account separately for product and period costs.
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