A company has contribution margin per unit of 18 and

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34. A company has contribution margin per unit of $18 and a contribution margin ratio of 40%. What is the unit selling price? a. $30.00 b. $45.00 c. $7.20 d. Cannot be determined B is correct. Section “Cost-volume-profit analysis” – The unit selling price is $45 ($18/.4). 35. The level of activity at which total revenues equal total costs is the D is correct. Section “Cost-volume-profit analysis” – The level of activity at which total revenues equal total costs is called the break-even point.
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37. The break-even point is where B is correct. Section “Break-even analysis” – The break even point is where the contribution margin equals fixed costs. 38. The break-even point cannot be determined by C is correct. Section “Break-even analysis” – The contribution margin cannot be determined by reading prior years’ financial statements. 41. The break-even point in units is computed by dividing fixed costs by the a. contribution margin ratio. b. contribution margin per unit. c. total contribution margin. d. unit selling price. B is correct. Section “Break-even analysis” – The break-even point in units if computed by dividing fixed costs by the contribution margin per unit. 42. In a CVP graph, the break-even point is at the intersection of the sales line and the C is correct. Section “Break-even analysis” – In a CVP graph, the break-even point is at the intersection of the sales line and the total cost line.
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43. In evaluating the margin of safety, the B is correct. Section “Margin of safety” – In evaluating the margin of safety, the higher the ratio, the greater the margin of safety.
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