Unformatted text preview: variable cost per unit of Alpha? a. $3.00 b. $4.00 c. $4.50 d. $5.00 e. $7.50 5. TechCo has an Operating Leverage Factor of 8.0. If its Variable Cost (in total) is $100,000 and its Operating Income is $50,000, how much is Fixed Cost (total)? a. $12,500 b. $300,000 c. $350,000 d. $400,000 e. $800,000 Answers Here a. b. c. d. a d d a c Q $ Q $ Q $ Q $ OLF 8.0 x OI $50k = CM $400k; CM $400k – FC ?? = OI $50k; so solving FC = $350k B/E Units 36k = FC $162k / CM/Unit ??; solving CM/Unit = $4.50; Price – VC = CM, and we know that VC = .4P and CM = $4.50; so P  .4P = $4.50; and solving P = $7.50 so VC = (.4)(7.50) = $3.00. Note that graphs have been reordered in different versions of quiz, so answer is not always d....
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 Spring '08
 Welsh
 Managerial Accounting

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