Reference: Survey of Accounting 6th edition Book

Based on Chapter 11

These are practice study questions

6. Burke Company has a breakeven of $600,000 in total sales. Assuming the company sells its product for $50 per unit, what is its margin of safety in units if sales total $850,000? A} 5,000 units B) 250,000 units C} 12,000 units 0] 17,000 units 5. Zeus, Inc. produces a product that has a variable cost 01'5950 per unit. The company's xed costs are $40,000. The product sells for $12.00 a unit and the company desires to earn a $20,000 prot. What is the volume of sales in units required to achieve the target prot? {Do not round intermediate calculations.) A} 24,000 units B) 16,000 units C} 17,000 units 0} 4,000 units 4. Pierce Company's breakeven point is 12,000 units. Its product sells for S25 and has a $10 variable cost per unit. What is the company's total xed cost amount? A] $250,000 B) $180,000 0}- 51201000 0] Fixed costs cannot be computed with the information provided. 3. Rocky Mountain Bottling Company produces a soft drink that is sold for a dollar. At production and sales of 800,000 units, the company pays $600,000 in production costs, half of which are fixed costs. At that volume, general, selling, and administrative costs amount to $250,000 of which $70,000 are fixed costs. What is the amount of contribution margin per unit? A) $0.40 B) $0.5375 C) $0.25 D) None of these is correct.2. The following income statement is provided for Ramirez Company for the current year: Sales revenue {2,500 units X 540 per unit] 5 100,000 Cost of goods sold (variable; 2,500 units x $16 per unit} {40,000} Cost of goods sold {xed} {8,000} Gross margin 52,000 Administrative salaries {12,000} Depreciation {8,000} Supplies {2,500 units x 54 per unit} {10,000} Net income $ 22,000 What amount was the company's contribution margin? A} $50,000 B} 522,000 C} 552,000 01 $60,000 1. Wu Company incurred $40,000 of fixed cost and $50,000 of variable cost when 4,000 units of product were made and sold. If the company's volume doubles, the total cost per unit will: A) stay the same. B) decrease. C) double as well. D) increase but will not double.The following income statement is provided for Ramirez Company for the current year: Sales revenue {3,266 units x $28.?B per unit) 66,24: Cost of goods sold (variable; 3,266 units 3 $8.76 (2?,849) per unit) Cost of goods sold (fixed) (4,?69) Gross margin 33,?89 dministrative salaries (6,?88) Depreciation (4,?68) Supplies (3,298 units X $2.78 per unit) (8,649) Net income $ 13,666 What amount was the company's contribution margin? Pierce Company's break-even point is 17,000 units. Its product sells for $28 and has a $13 variable cost per unit. What is the company's total fixed cost amount? M and M, Inc. produces a product that has a variable cost of $3.80 per unit. The company's xed costs are $35,200. The product is sold for $7 per unit and the company desires to ea m a target prot of $19,200. What is the amount of sales that will be necessary to earn the desired prot? [Do not round intermediate calculations.) Wu Company incurred $85,000 of fixed cost and $98,600 of variable cost when 2,900 units of product were made and sold. If the company's volume increases to 3,400 units, the total cost per unit will be