298
165.
Correct answer c.
Bolger’s breakeven point would increase by 375 units as shown below.
Current breakeven point:
($300 - $210)X
=
$360,000
$90 X
=
$360,000
X
=
4,000 units
Future breakeven point:
($300 - $220)X
=
$350,000
$80X
=
$350,000
X
=
4,375 units
Difference
4,375 – 4,000
=
375 units
166.
Correct answer b.
Phillips breakeven volume is 82,500 units, and the company’s anticipated operating
income is $9,250,000 as calculated below.
Breakeven point:
($160 - $60) X
=
($55 x 150,000)
$100X
=
$8,250,000
X
=
82,500 units
Operating income
=
[($160 - $60) x 175,000] - $8,250,000
=
$9,250,000
167.
Correct answer c.
Cost-volume-profit analysis assumes that variable costs do not change with a change in
volume; therefore, option C is the correct response.
All other assumptions presented are correct.
168.
Correct answer b.
At the breakeven point, Ace would sell 9,231 units of Product C based on a sales mix
of 80% Product C.
Breakeven point:
80% C contribution + 20% F contribution = Fixed costs
[(.8 x $2) + (.2 x $5)] x A
=
$30,000
$2.60A
=
$30,000
A
=
22,538.46
Product C breakeven point:
11,538.46 x 80%
=
9,231 units
169.
Correct answer c.
12 x 3,500 = 42,000
.28
20 x 3,000 = 60,000
.40
12 x 4,000 = 48,000
.32
150,000
.28 x (18-3) = 4.2
.40 x (15-1) = 5.6
.32 x (20-0) = 6.4
16.2 weighted CM
Fixed: 165,000 + 249,000 + 316,000 + 565,000 = 1,295,000 / 16.2 = 79,938