1.A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 pretax income, how many units must be sold?

a. 6,500

b. 6,000

c. 500

d. 5,000

e. 5,500

2.Cost-volume-profit analysis is a precise tool for perfectly predicting the profit consequences of cost changes, price changes, and volume changes

True/False

3.The contribution margin ratio is the percent by which the margin of safety exceeds the break-even point

True/False

4.A June sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit. The desired ending inventory of units is 15% higher than the beginning inventory of 1,000 units. Total June sales are anticipated to be:

a. 63,000

b. 67,500

c. 61,250

d. 74,250

e. 60,000

a. 6,500

b. 6,000

c. 500

d. 5,000

e. 5,500

2.Cost-volume-profit analysis is a precise tool for perfectly predicting the profit consequences of cost changes, price changes, and volume changes

True/False

3.The contribution margin ratio is the percent by which the margin of safety exceeds the break-even point

True/False

4.A June sales forecast projects that 6,000 units are going to be sold at a price of $10.50 per unit. The desired ending inventory of units is 15% higher than the beginning inventory of 1,000 units. Total June sales are anticipated to be:

a. 63,000

b. 67,500

c. 61,250

d. 74,250

e. 60,000