The unit contribution margins of Product X and Product Y are 10 and 9

# The unit contribution margins of product x and

• Bebo008
• 78
• 92% (96) 88 out of 96 people found this document helpful

This preview shows page 15 - 18 out of 78 pages.

67. The unit contribution margins of Product X and Product Y are \$10 and \$9, respectively. Total fixed expenses will be the same regardless of which product is produced and sold. Which of the following statements will always be true: A) Product X has a higher contribution margin ratio than Product Y. B) if total sales are \$300,000 no matter which product is sold, it is more profitable to sell Product X than Product Y. C) less units would be required to break even if only Product X is sold than if only Product Y is sold. D) responses A, B, and C are all correct. 9 Ans: Level: Hard LO: C68. A company sells two products--J and K. The sales mix is expected to be \$3.00 of sales of Product K for every \$1.00 of sales of Product J. Product J has a contribution margin ratio of 40% whereas Product K has a contribution margin ratio of 50%. Annual fixed expenses are expected to be \$120,000. The overall break-even point for the company in dollar sales is expected to be closest to:Source: CIMA, adaptedLevel: Hard LO: CBrewer, Introduction to Managerial Accounting, 3/e37
69. Lepage Corporation has provided its contribution format income statement for January. The company produces and sells a single product.If the company sells 4,700 units, its total contribution margin should be closest to:Level: Easy LO: C70. Ofarrell Corporation, a company that produces and sells a single product, has provided its contribution format income statement for March.If the company sells 5,400 units, its net operating income should be closest to:Level: Easy LO: C71. Brees Inc., a company produces and sells a single product, has provided its contribution format income statement for April.If the company sells 5,800 units, its total contribution margin should be closest to:A) \$55,800B) \$52,200C) \$6,642D) \$47,0001 Ans: Level: Easy LO: BBrewer, Introduction to Managerial Accounting, 3/e38
72. Florek Inc. produces and sells a single product. The company has provided its contribution format income statement for March.If the company sells 5,900 units, its net operating income should be closest to:Level: Easy LO: A73. Maack Corporation’s contribution margin ratio is 16% and its fixed monthly expenses are \$44,000. If the company’s sales for a month are \$299,000, what is the best estimate of the company’s net operating income? Assume that the fixed monthly expenses do not change.Level: Easy LO: B