Extra multiple choice for test 2

Extra multiple choice for test 2 - MC #2 Student: _ 1. An...

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MC #2 Student: ___________________________________________________________________________ 1. An example of a cost that is variable with respect to the number of units produced and sold is: A. insurance on the headquarters building. B. power to run production equipment. C. supervisory salaries. D. depreciation of factory facilities. 2. Tempcon, Inc. sells and installs furnaces for $3,000 per furnace. The following cost formula relates to last year's operations at Tempcon: Y = $125,000 + $1,800X If Tempcon sold and installed 500 furnaces last year, what was its total contribution margin last year? A. $475,000 B. $900,000 C. $1,025,000 D. $600,000 3. The cost of goods sold in a retail store totaled $325,000. Fixed selling and administrative expenses totaled $115,000 and variable selling and administrative expenses were $210,000. If the store's contribution margin totaled $590,000, then sales must have been: A. $1,125,000 B. $1,030,000 C. $915,000 D. $650,000 4. Which of the following is true regarding the contribution margin ratio of a single product company? A. As fixed expenses decrease, the contribution margin ratio increases. B. The contribution margin ratio multiplied by the variable expense per unit equals the contribution margin per unit. C. If sales increase, the dollar increase in net operating income can be computed by multiplying the contribution margin ratio by the dollar increase in sales. D. The contribution margin ratio increases as the number of units sold increases.
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5. Assuming that the unit sales are unchanged, the total contribution margin will decrease if: A. fixed expenses increase. B. fixed expenses decrease. C. variable expense per unit increases. D. variable expense per unit decreases. 6. Witting Corporation produces and sells a single product. Data concerning that product appear below: The break-even in monthly unit sales is closest to: A. 2,523 B. 1,502 C. 3,337 D. 2,730 7. A product sells for $20 per unit, and has a contribution margin ratio of 40%. Fixed expenses are $120,000.
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This note was uploaded on 07/01/2011 for the course ACCT 52548 taught by Professor Charleslewis during the Spring '10 term at HCCS.

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Extra multiple choice for test 2 - MC #2 Student: _ 1. An...

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