Question 1
Company XYZ sells three products: rocks, paper, and scissors.
The rocks’ contribution margin (CM) per unit is highest and the
scissors’ CM per unit is lowest. Which one of the following
events will increase the company’s overall break-even point?
a) A decrease in the cost of direct materials used in all three products
b) Increasing scissors’ selling price
c) An increase in the cost of direct materials used in all three products
d) An increase in the demand for rocks
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Question 2
A company has provided the following data:
Sales 2,000 units
Sales price $50/unit
Variable cost $30/unit
Fixed cost $25,000
If the variable cost per unit is decreased by 10%, the total
fixed cost is increased by 20%, and all other factors remain
the same, what will be the effect on operating income?
a) It will decrease by $5,000.
b) It will decrease by $1,000.
c) It will increase by $1,000.
, d) It will increase by $6,000.
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Question 3
UCB has the following financial results for the month of June:
Sales $3,120,000
Variable costs 1,920,000
Contribution margin 1,200,000
Fixed costs 1,380,000
Profit/loss $(180,000)
A total of 200,000 units were produced and sold during the
month of June. In order to break even, how many units should
be produced and sold?
a) 143,750 units
b) 200,000 units
c) 230,000 units
d) 3,588,000 units
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Question 4
The James Company requires 22,223 units to be sold to break
even. The sales price per unit is $10 and variable costs per
unit are $5.50. How much were the total fixed costs for this
company?
a) $100,004
b) $122,227
, c) $222,230
d) $111,115
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Question 5
The contribution margin ratio (CM ratio) is:
a) revenues equalling costs.
b) the CM converted to a percentage by dividing the CM dollar value by the variable costs.
c) fixed costs less target profit.
d) the CM converted to a percentage by dividing the CM dollar value by the sales value.
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Question 6
J&J Co. produces alarm system keypads. The sales price of
each unit is $12.50 and the variable costs per unit are $10.
The total fixed costs are $100,000. How many units does J&J
need to sell in order to earn a profit of $150,000?
a) 20,000
b) 25,000
c) 40,000
d) 100,000
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Company XYZ sells three products: rocks, paper, and scissors.
The rocks’ contribution margin (CM) per unit is highest and the
scissors’ CM per unit is lowest. Which one of the following
events will increase the company’s overall break-even point?
a) A decrease in the cost of direct materials used in all three products
b) Increasing scissors’ selling price
c) An increase in the cost of direct materials used in all three products
d) An increase in the demand for rocks
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Question 2
A company has provided the following data:
Sales 2,000 units
Sales price $50/unit
Variable cost $30/unit
Fixed cost $25,000
If the variable cost per unit is decreased by 10%, the total
fixed cost is increased by 20%, and all other factors remain
the same, what will be the effect on operating income?
a) It will decrease by $5,000.
b) It will decrease by $1,000.
c) It will increase by $1,000.
, d) It will increase by $6,000.
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Question 3
UCB has the following financial results for the month of June:
Sales $3,120,000
Variable costs 1,920,000
Contribution margin 1,200,000
Fixed costs 1,380,000
Profit/loss $(180,000)
A total of 200,000 units were produced and sold during the
month of June. In order to break even, how many units should
be produced and sold?
a) 143,750 units
b) 200,000 units
c) 230,000 units
d) 3,588,000 units
View Feedback
Question 4
The James Company requires 22,223 units to be sold to break
even. The sales price per unit is $10 and variable costs per
unit are $5.50. How much were the total fixed costs for this
company?
a) $100,004
b) $122,227
, c) $222,230
d) $111,115
View Feedback
Question 5
The contribution margin ratio (CM ratio) is:
a) revenues equalling costs.
b) the CM converted to a percentage by dividing the CM dollar value by the variable costs.
c) fixed costs less target profit.
d) the CM converted to a percentage by dividing the CM dollar value by the sales value.
View Feedback
Question 6
J&J Co. produces alarm system keypads. The sales price of
each unit is $12.50 and the variable costs per unit are $10.
The total fixed costs are $100,000. How many units does J&J
need to sell in order to earn a profit of $150,000?
a) 20,000
b) 25,000
c) 40,000
d) 100,000
View Feedback
