Q5 - Name _ Managerial Accounting 102 Chapter 5 Ending Exam...

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Name ____________________________ Managerial Accounting – 102 Chapter 5 Ending Exam March 15, 2011 1) Regarding variable and fixed costs, as volume changes within the relevant range a) both total variable costs and unit fixed costs are constant. b) both total variable costs and unit fixed costs fluctuate. c) both total variable costs and total fixed costs are constant. d) both total variable costs and total fixed costs fluctuate. 2) How much revenue is required to earn a target income of $80,000 if total fixed costs are $100,000 and the contribution margin ratio is 40%? a) $300,000 b) $200,000 c) $450,000 d) $330,000 3) A company has total fixed costs of $120,000 and a contribution margin ratio of 20%. The total sales necessary to break even are a) $600,000. b) $480,000. c) $150,000. d) $144,000. 4) A company sells a product which has a unit selling price of $5, a unit variable cost of $3, and total fixed costs of $120,000. The number of units the company must sell to break even is a) 24,000 units. b) 40,000 units. c) 60,000 units. d) 240,000 units. 5) Banachek, Inc. produces hair brushes and has been operating at breakeven. The selling price is $20 per unit and the variable costs are $8 per brush. Fixed costs per month are $4,800. If Banachek sells 15 more units above breakeven, how much does profit increase as a result? a) $120 b) $180 c) $300 d) $5,100 6) DeLaney’s variable costs are 30% of sales. A new advertising campaign would cost $22,000 and increase sales by $40,000. If they advertise, how much will the company's net income increase? a) $28,000 b) $18,000 c) $12,000 d) $ 6,000 7) At the high level of activity in October, a company used 6,000 machine hours resulting in a utility cost of $12,000. In March, a month of low activity, 3,000 machine hours were used and utility costs totaled
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This note was uploaded on 07/28/2011 for the course ACCT 4033 taught by Professor Mcknight during the Spring '08 term at Arkansas Tech.

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Q5 - Name _ Managerial Accounting 102 Chapter 5 Ending Exam...

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