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Unformatted text preview: Page 1 Quiz – Chapter 17 – Solution 1. Rider Company sells a single product. The product has a selling price of $40 per unit and variable expenses of $15 per unit. The company's fixed expenses total $30,000 per year. The company's breakeven point in terms of total dollar sales is: A) $100,000. B) $80,000. C) $60,000. D) $48,000. The answer is d. CMR = (PV)/P = ($40  $15)/$40 = 62.5% Px = F/ (CMR) Px = $30,000/.625 = $48,000 Use the following to answer questions 23: Weiss Corporation produces two models of wood chairs, Colonial and Early American. The Colonial sells for $60 per chair and the Early American sells for $80 per chair. Variable expenses for each model are as follows: Colonial Early American Variable production cost per unit....... $35 $48 Variable selling expense per unit ....... 9 8 Total fixed expenses are $39,600 per month. Expected monthly sales are: Colonial, 1,800 units; Early American, 600 units. 2. The contribution margin per chair for the Colonial model is: A) $51. B) $16. C) $35. D) $25. The answer is b. CM = PV = $60  $35  $9 = $16. Page 2 3. If the sales mix and sales units are as expected, the breakeven in sales dollars is closest to: A) $132,000. B) $148,500. C) $143,000. D) $139,764....
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This note was uploaded on 10/02/2008 for the course MGMT 122 taught by Professor Saouma during the Spring '08 term at UCLA.
 Spring '08
 Saouma

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