XYZ Inc. sells a single product for $10 per unit. Variable production costs are $5 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. If sales were to increase by 3,000 units, by how much would operating profit increase?

a.

$8,000

b.

$4,000

c.

$10,000

d.

$12,000

Question 2

XYZ Inc. sells a single product for $30 per unit. Variable production costs are $18 per unit. Fixed overhead costs amount $80,000 per month. Variable selling costs are $3 per unit. Fixed selling costs are $10,000 per month. Last month, the company produced 10,000 units and sold 8,000 units. What is the company's breakeven point in sales dollars?

a.

$240,000

b.

$40,000

c.

$300,000

d.

$120,000

Question 3

XYZ Inc. sells a single product for $10 per unit. Variable production costs are $5 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 6,000 units. What was ABC's net operating income?

a.

$15,000

b.

$9,000

c.

$22,000

d.

$27,000

Question 4

XYZ Inc. sells a single product for $12 per unit. Variable production costs are $5 per unit. Fixed overhead costs amount $10,000 per month. Variable selling costs are $1 per unit. Fixed selling costs are $2,000 per month. Last month, the company had no sales or production. What was ABC's net operating income or loss?

a.

$12,000

b.

$22,000

c.

$27,000

d.

$17,000

Question 5

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 variable costs were reduced by $3 per unit?

a.

$20,000

b.

$24,000

c.

$40,000

d.

$12,000

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 two products, A and B. The selling price, variable cost and contribution margin per unit of product are shown below:

Fixed costs amount to $340,000. The company sells five times as many units of B as it does A. How many units of each product does the company have to sell to break even?

a.

A:3,148 units; B: 15,741 units

b.

A: 10,000 units; B: 50,000 units

c.

A: 5,000 units; B: 5,000 units

d.

A: 1,667 units; B: 8,333 units