Practice test Chap6

Practice test Chap6 - Practice Test Chapter 6 Accounting...

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Practice Test Chapter 6 Accounting 203 1. A product sells for $30 per unit and has variable costs of $18 per unit. The manufacturer's fixed costs are $720,000. If the variable costs per unit were to decrease to $15 per unit and fixed costs increase to $900,000, break-even point (in units) would: A) Equal 6,000. B) Not change. C) Increase by 20,000. D) Decrease by 20,000. E) Increase by 6,000. 2. Mueller Corp. manufactures compact discs that sell for $5.00. Fixed costs are $28,000 and variable costs are $3.60 per unit. Mueller can buy a newer production machine that will increase fixed costs by $8,000 per year, but will decrease variable costs by $0.40 per unit. What effect would the purchase of the new machine have on Mueller's break-even point (in units)? A) No effect on the break-even point (in units). B) 4,444 unit increase. C) 4,444 unit decrease. D) 5,714 unit increase. E) 9,850 unit decrease. 3.
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Practice test Chap6 - Practice Test Chapter 6 Accounting...

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