Sweet Charity Company manufactures candy bars for fundraising initiatives for childrens nonprofits. Candy bars are sold to organizations at $1.00 each. Variable costs of production and packaging are $.60 and company fixed costs are $700,000. The companys current sales level is $2,000,000. What is Sweet Charitys margin of safety in dollars?

a	$100,000
b	$144,000
c	$250,000
d	$240,000

Question 2 (1 point)

True or False: All else being equal, as variable costs rise, the breakeven point decreases.

True

False

Question 3 (1 point)

Which of the following costs would not be deducted from the revenue per unit to arrive at contribution margin?

a	cost of ink for a printing company
b	cost of property insurance for a cell phone manufacturer
c	cost of steel for an automobile manufacturing company
d	cost of direct labor for a pharmaceutical company

Question 4 (1 point)Swiss Chocolate Manufacturing Company manufactures boxes of truffles and peppermint bark for sales at various holidays throughout the year. The sales and variable costs are given below:

	Peppermint bark tins	Truffle boxes
	per unit	per unit
Sell price to retailer	$ 9.00	$ 15.00
Cost of raw materials (chocolate/sugar/etc.)	$ 2.00	$ 3.00
Cost of packaging (tin or heart-shaped box)	$ 3.00	$ 2.00
Cost of labor (manufacturing and packing)	$ 1.50	$ 2.50
Cost of selling commission (per tin/box)	$ 0.125	$ 0.50
Cost of shipping (per tin/box)	$ 0.25	$ 0.25

The ratio of sales units is two peppermint bark tins for each truffle box sold. Swiss Chocolate Manufacturing Companys fixed costs are $100,000. How many units of each product must be sold to achieve an operating profit of $10,000?

a	10,000 peppermint bark tins and 10,000 truffle boxes
b	20,000 peppermint bark tins and 10,000 truffle boxes
c	10,000 peppermint bark tins and 20,000 truffle boxes
d	20,000 peppermint bark tins and 20,000 truffle boxes

Question 5 (1 point)

Tasty Toffee Companys total revenue is $400,000. Variable costs of manufacturing are $100,000 and fixed costs of manufacturing are $200,000. Variable costs of marketing are $10,000 and fixed costs of marketing are $50,000. Its corporate tax rate is 50%. How much must total revenue increase if Tasty Toffee wishes to achieve a net income of $100,000?

a	$120,690
b	$220,690
c	$620,690
d	$420,690

Question 6 (1 point)

All else being equal, when sales revenue per unit increases, ________.

a	the breakeven point is unaffected
b	contribution margin per unit increases
c	fixed costs will be more likely to increase
d	contribution margin per unit is unaffected

Question 7 (1 point)

True or False: On a cost volume profit graph, the breakeven point is depicted at the intersection of the revenue and total cost lines.

True

False

Question 8 (1 point)

True or False: On a cost volume profit graph, if the revenue line is below the total cost line, a profit results.

True

False

Question 9 (1 point)

Tasty Toffee Companys total revenue is $400,000. Variable costs of manufacturing are $100,000 and fixed costs of manufacturing are $200,000. Variable costs of marketing are $10,000 and fixed costs of marketing are $50,000. What is Tasty Toffees operating income?

a	$100,000
b	$40,000
c	$60,000
d	$0

Question 10 (1 point)

Sweet Charity Company manufactures candy bars for fundraising initiatives for childrens nonprofits. Candy bars are sold to organizations at $1.00 each. Variable costs of production and packaging are $.60 and company fixed costs are $700,000. The companys current sales level is $2,000,000. What is Sweet Charitys breakeven point in units?

a	2,000,000
b	1,300,000
c	1,750,000
d	700,000