MSQ-01 - Activity Cost & CVP Analysis (Final)

Abc company breaks even at 300000 sales and earns

Info icon This is a preview. Sign up to view the full content.

View Full Document Right Arrow Icon
29. ABC Company breaks even at $300,000 sales and earns $30,000 at $350,000 sales. Which of the following is true? MSQ-01 Page 9
Image of page 9
30. A company has sales of $500,000, variable costs of $300,000, and pretax profit of $150,000. If the company increased the sales price per unit by 10%, reduced fixed costs by 20%, and left variable cost per unit unchanged, what would be the new breakeven point in sales dollars? A . $88,000 B. $100,000 C. $110,000 D. $125,000 31. The Machan Manufacturing Company’s year-end income statement is as follows: Sales (20,000 units) $360,000 Variable costs 220,000 Contribution margin $140,000 Fixed costs 105,000 Net income $ 35,000 Management is unhappy with the results and plans to make some changes for next year. If management implements a new marketing program, fixed costs are expected to increase by $19,200 and variable costs to increase by $1 per unit. Unit sales are expected to increase by 15 percent. What is the effect on income? A. decrease of $21,200 E. no change B. increase of $1,800 E. increase of $14,800 C. increase of $13,800
Image of page 10
Image of page 11
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern