Session 11_Quiz

# Session 11_Quiz - Submission View Your quiz has been...

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Submission View Your quiz has been submitted successfully. Question 1 Tory Company sells a single product. Troy estimates demand and costs at various activity levels as follows: Units Sold Price Total Variable Costs Fixed Costs 120,000 \$48 \$3,000,000 \$1,000,000 148,500 \$45 \$3,520,000 \$1,000,000 160,000 \$40 \$4,000,000 \$1,000,000 180,000 \$35 \$4,500,000 \$1,000,000 200,000 \$30 \$5,000,000 \$1,000,000 How much profit will Troy have if a price of \$45 is charged? Answer: 2,162,500 Hide Feedback total Variable Costs/Units Sold = Variable Cost Per Unit Price per Unit - Variable Cost Per Unit = Contribution margin per unit Contribution Margin per unit * Units Sold = Total Contribution Margin Profit = Total Contribution Margin - Fixed Costs Question 2 The Falling Snow Company is considering production of a lighted world globe that the company would price at a markup of 0.25 above full cost. Management estimates that the variable cost of the globe will be \$60 per unit and fixed costs per year will be \$240,000. Assuming sales of 1,200 units, what is the full selling price of a globe with a 0.25 markup?

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