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CH 3 QuizKEY - 1 Schuppener Company sells its only product...

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1. Schuppener Company sells its only product for $18 per unit, variable production costs are $6 per unit, and selling and administrative costs are $3 per unit. Fixed costs for 10,000 units are $10,000. The contribution margin is: a. $12 per unit b. $9 per unit c. $11 per unit d. $8 per unit Answer : b Difficulty : 2 Objective : 2 Terms to Learn : cost-volume-profit (CVP) analysis $18 – $6 – $3 = $9 2. Fixed costs equal $12,000, unit contribution margin equals $20, and the number of units sold equal 1,600. Operating income is: Answer : b Difficulty : 3 Objective : 2 Terms to Learn : cost-volume-profit (CVP) analysis (1,600 x $20) – $12,000 = $20,000 3. At the breakeven point of 200 units, variable costs total $400 and fixed costs total $600. The 201st unit sold will contribute ___________ to profits. Answer : c Difficulty : 3 Objective : 3 Terms to Learn : contribution margin $1,000 $400 $600 = 0; Sales ($1,000 / 200) – Variable costs ($400 / 200) = $3 CM
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