Units sold 10,000

Selling price $200 per unit

Variable costs $110 per unit

Total fixed costs $200,000

Tax rate 40%

9. How many units have to be sold in order to earn an aftertax net income of $600,000?

a. 11,111

b. 12,222

c. 13,333

d. 14,444

10. First: Prepare a contribution margin income statement based on the 10,000 units sold. Second: Using one of the short-cut tricks that you learned, assuming sales increased by 30 percent, what would the new net income be?

a.	$870,000
b.	$970,000
c.	$1,070,000
d.	$1,170,000

11. First: Go back to the original data and use the contribution margin income statement based on the 10,000 units sold that you just prepared for Question #10. Second: Using the other short-cut trick that you learned, assuming the sales price increased by 20 percent, what would the new net income be?

a.	$1,100,000
b.	$1,200,000
c.	$1,300,000

d. $1,140,000

12. First: Go back to the original data and use the contribution margin income statement based on the 10,000 units sold that you prepared for Question #10. Suppose variable costs increase by 30% and fixed costs decrease 40%. What is the new breakeven point in units?

1. 1905 units

2. 2005 units

3. 2105 units

4. 2205 units

13. Assuming a constant mix of 4 units of Small for every 1 unit of Large.

Small Large

Sales $30 $40

Variable cost per unit 15 15

Total common fixed costs $85,000

The breakeven point in units would be

a. 5,800 units of Small and 600 units of Large.

b. 1,000 units of Small and 800 units of Large.

c. 1,500 units of Small and 900 units of Large.

d. 4000 units of Small and 1,000 units of Large.