1. Which of the following is an example of a cost that varies in total as the number of units produced changes? Direct materials cost
2. BigTex Co. manufactures office furniture. During the most productive month of the year, 1,500 desks were manufactured at a total cost of $41,000. In its slowest month, the company made 900 desks at a cost of $30,800. Using the high-low method of cost estimation, total fixed costs in July are: $15,500
3. If sales are $820,000, variable costs are 62% of sales, and operating income is $260,000, what is the contribution margin ratio? 38%
4. A firm operated at 80% of capacity for the past year, during which fixed costs were $210,000, variable costs were 65% of sales, and sales were $1,000,000. Operating profit was: $140,000
5. If fixed costs are $300,000 and the unit contribution margin is $5, what amount of units must be sold in order to realize an operating income of $50,000? 70,000
6. If fixed costs are $561,000 and the unit contribution margin is $8.00, what is the break-even point in units if variable costs are decreased by $.50 a unit? $66,000
7. If fixed costs increased and variable costs per unit decreased, the break-even point would: increase, decrease, or remain the same, depending upon the amounts of increase in fixed cost and decrease in variable cost
8. Salter Inc.'s unit selling price is $50, the unit variable costs are $35, fixed costs are $125,000, and current sales are 10,000 units. How much will operating income change if sales increase by 5,000 units? $75,000 increase
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- Spring '12