Deck 5: Cost-Volume-Profit Analysis

Question 1

M Studios retails their own brand of camera that they manufacture in their plant for $500. The plant capacity is 1,000 units per month and variable costs are $225 per camera. Total fixed costs for the year are $2.16 million. How many cameras must be sold per month to have a net income of $40,000?

A) 850
B) 900
C) 800
D) 750
E) 825

Answer 1

800

Question 2

A manufacturing company is considering producing a new product. The variable cost of the new product is $60 per unit, and the total fixed costs are $75,000 for a month. The company could produce 1,500 units per month, and sell the product for $125 each. What would be the net income at 75% capacity?

A) loss $3,500
B) loss $250
C) loss $1,800
D) loss $1,875
E) loss $2,025

Answer 2

loss $1,875

Question 3

M Studios retails their own brand of camera that they manufacture in their plant for $500. The plant capacity is 1,000 units per month and variable costs are $225 per camera. Total fixed costs for the year are $2.16 million. Calculate the break-even point as a percentage of capacity.

A) 34.5%
B) 65.5%
C) 50%
D) 60%
E) 62.5%

Answer 3

65.5%

Question 4

Kuldip's factory manufactures toys that sell for $29.95 each. The variable cost per toy is $11, and the total fixed costs for the month are $45,000. What is the break-even point in revenue per month?

A) $70,000
B) $75,480
C) $71,121
D) $73,215
E) $71,500

Question 5

Kuldip's factory manufactures toys that sell for $29.95 each. The variable cost per toy is $11, and the total fixed costs for the month are $45,000. Calculate the unit contribution margin.

A) $18.95
B) $17.95
C) $19.00
D) $17.50
E) $11.00

Question 6

Kuldip's factory manufactures toys that sell for $29.95 each. The variable cost per toy is $11, and the total fixed costs for the month are $45,000. What would unit sales have to be to attain a net income over $8,000?

A) 2,700 units
B) 2,650 units
C) 2,756 units
D) 2,797 units
E) 2,765 units

Question 7

Kuldip's factory manufactures toys that sell for $29.95 each. The variable cost per toy is $11, and the total fixed costs for the month are $45,000. What is the break-even point in units per month?

A) 2,100 units
B) 2,375 units
C) 2,300 units
D) 2`,450 units
E) 2,575 units

Question 8

A manufacturing company is considering producing a new product. The variable cost of the new product is $60 per unit, and the total fixed costs are $75,000 for a month. The company could produce 1,500 units per month, and sell the product for $125 each. What is the break-even point as a percent of capacity?

A) 81.2%
B) 76.9%
C) 75%
D) 72.4%
E) 63%

Question 9

Determine the monthly profit (loss) if it sells 325 units per month.

A) $1,500
B) ($1,500)
C) $3,000
D) $0
E) none of these

Question 10

A manufacturing company is considering producing a new product. The variable cost of the new product is $60 per unit, and the total fixed costs are $75,000 for a month. The company could produce 1,500 units per month, and sell the product for $125 each. Calculate the unit contribution margin.

A) 65
B) 50
C) 60
D) 125
E) 80

Question 11

The selling price of a widget is $15 and the fixed cost per month is $4,800. The variable cost per widget is $9. Calculate the contribution margin per unit.

A) $24
B) $9
C) $8
D) $6
E) $5

Question 12

M Studios retails their own brand of camera that they manufacture in their plant for $500. The plant capacity is 1,000 units per month and variable costs are $225 per camera. Total fixed costs for the year are $2.16 million. If fixed costs increase by 10%, what will be the net income at full capacity?

A) $85,000
B) $75,000
C) $80,000
D) $77,000
E) $75,500

Question 13

How many units must be sold per month to break even?

A) 167
B) 500
C) 400
D) 250
E) none of these

Question 14

A manufacturing company is considering producing a new product. The variable cost of the new product is $60 per unit, and the total fixed costs are $75,000 for a month. The company could produce 1,500 units per month, and sell the product for $125 each. What would be the net income at 90% capacity?

A) $10,000
B) $15,000
C) $12,750
D) $12,225
E) $16,000

Question 15

The selling price of a widget is $15 and the fixed cost per month is $4,800. The variable cost per widget is $9. Calculate the break-even point in units per month.

A) 320
B) 533
C) 800
D) 200
E) 400

Question 16

M Studios retails their own brand of camera that they manufacture in their plant for $500. The plant capacity is 1,000 units per month and variable costs are $225 per camera. Total fixed costs for the year are $2.16 million. Calculate the contribution margin per camera.

A) 275
B) 250
C) 225
D) 300
E) 325

Question 17

A manufacturing company is considering producing a new product. The variable cost of the new product is $60 per unit, and the total fixed costs are $75,000 for a month. The company could produce 1500 units per month, and sell the product for $125 each. What sales would result in a net income of $16,000?

A) 1200 units
B) 1250 units
C) 1300 units
D) 1375 units
E) 1400 units

Question 18

How many units must be sold per month to earn a profit of $7,000?

A) 342
B) 425
C) 675
D) 575
E) none of these

Question 19

Kuldip's factory manufactures toys that sell for $29.95 each. The variable cost per toy is $11, and the total fixed costs for the month are $45,000. What would unit sales have to be to attain a net income over $12,000?

A) 3,050 units
B) 2,900 units
C) 2,950 units
D) 2,996 units
E) 3,008 units

Question 20

M Studios retails their own brand of camera that they manufacture in their plant for $500. The plant capacity is 1,000 units per month and variable costs are $225 per camera. Total fixed costs for the year are $2.16 million. If fixed costs increase by 10%, how many cameras per month would have to be sold to maintain a net income of $49,500?

A) 950 units
B) 875 units
C) 850 units
D) 925 units
E) 900 units

Question 21

The current annual budget for Armstrong Ltd. indicates total revenue of $8,000,000. The total variable costs are $1,600,000 and fixed costs are $5,600,000. Calculate the net income if total revenue for the year falls below the budget by $1,000,000.

A) $400,000
B) $0
C) ($200,000) Loss
D) ($220,000) Loss
E) ($800,000) Loss

Question 22

Weiner's Hot Dog Stand sells hot dogs for $2.50 each. The variable cost per hot dog is $1.75 and fixed costs per month are $1,800. If Weiner's fixed cost per month was to increase to $2,880, to what level would he have to reduce his variable cost per hot dog in order to maintain the current break-even point in units?

A) $1.20
B) $1.30
C) $1.40
D) $1.50
E) $1.60

Question 23

Ace Corporation's variable costs are equal to 43% of sales revenue. Their fixed costs per month are $600,000. Calculate the contribution rate.

A) 22%
B) 34%
C) 43%
D) 53%
E) 57%

Question 24

The current annual budget for Armstrong Ltd. indicates total revenue of $8,000,000. The total variable costs are $1,600,000 and fixed costs are $5,600,000. Calculate the net income if total revenue for the year exceeds the budget by $1,000,000.

A) $2,400,000
B) $2,200,000
C) $2,000,000
D) $1,800,000
E) $1,600,000

Question 25

The selling price of a widget is $15 and the fixed cost per month is $4,800. The variable cost per widget is $9. Calculate the revenue per month required to break-even.

A) $4,800
B) $7,200
C) $12,000
D) $14,400
E) $16,000

Question 26

The current annual budget for Armstrong Ltd. indicates total revenue of $8,000,000. The total variable costs are $1,600,000 and fixed costs are $5,600,000. Calculate the contribution rate.

A) 20%
B) 40%
C) 50%
D) 70%
E) 80%

Question 27

The current annual budget for Armstrong Ltd. indicates total revenue of $8,000,000. The total variable costs are $1,600,000 and fixed costs are $5,600,000. Calculate break-even revenue per year.

A) $7,200,000
B) $7,000,000
C) $5,600,000
D) $3,200,000
E) $8,000,000

Question 28

Weiner's Hot Dog Stand sells hot dogs for $2.50 each. The variable cost per hot dog is $1.75 and fixed costs per month are $1,800. How much profit should Weiner realize on the sale of 3,000 hot dogs?

A) $7,500
B) $1,500
C) $1,016
D) $850
E) $450

Question 29

At this time, Weiner's Hot Dog Stand sells hot dogs for $2.50 each. The variable cost per hot dog is $1.75 and fixed costs per month are $1,800. Weiner is considering some changes. If Weiner increases his selling price to $2.75 per hot dog, and reduce his variable cost per hot dog to $1.15, what level of fixed cost per month would reduce his break-even point in units by 50% from what it is now?

A) $900
B) $1,050
C) $1,450
D) $1,920
E) $2,400

Question 30

Ace Corporation's variable costs are equal to 43% of sales revenue. Their fixed costs per month are $600,000. Calculate total revenue at the break-even point.

A) $1,395,349
B) $858,000
C) $942,000
D) $1,052,632
E) $1,355,400

Question 31

The selling price of a widget is $15 and the fixed cost per month is $4,800. The variable cost per widget is $9. Calculate the net income on revenue of $10,000 per month.

A) $4,000
B) $5,200
C) $1,200
D) ($800) Loss
E) ($1,200) Loss

Question 32

A small company can produce 500 dolls per week. The doll retails for $30. The variable costs are $7.50 per doll and fixed costs are $9,000 per week. What is the break-even point expressed as a percent of capacity?

A) 75%
B) 80%
C) 70%
D) 85%
E) 65%

Question 33

A small company can produce 500 dolls per week. The doll retails for $30. The variable costs are $7.50 per doll and fixed costs are $9,000 per week. What is the break-even point expressed in dollars of revenue?

A) $12,000
B) $10,000
C) $15,000
D) $12,500
E) $14,750

Question 34

The current annual budget for Armstrong Ltd. indicates total revenue of $8,000,000. The total variable costs are $1,600,000 and fixed costs are $5,600,000. Calculate the budgeted net income.

A) $6,400,000
B) $2,400,000
C) $1,200.000
D) $800,000
E) ($4,000,000) Loss

Question 35

The selling price of a widget is $15 and the fixed cost per month is $4,800. The variable cost per widget is $9. Calculate the number of units that must be sold to return a net income of $2,100 per month.

A) 1,400
B) 1,150
C) 767
D) 533
E) 350

Question 36

Hot Dog Stand sells hot dogs for $2.50 each. The variable cost per hot dog is $1.75 and fixed costs per month are $1,800. How many hot dogs must Weiner sell in a month to break even?

A) 1,800
B) 2,000
C) 2,400
D) 2,750
E) 720

Question 37

The selling price of a widget is $15 and the fixed cost per month is $4,800. The variable cost per widget is $9. Calculate the contribution margin rate.

A) 30%
B) 40%
C) 50%
D) 60%
E) 70%

Question 38

The selling price of a widget is $15 and the fixed cost per month is $4,800. The variable cost per widget is $9. Calculate the net income on sales of 850 units per month.

A) $12,750
B) $7,950
C) $5,100
D) $1,150
E) $300

Question 39

Ace Corporation's variable costs are equal to 43% of sales revenue. Their fixed costs per month are $600,000. Calculate the net income on sales of $2,000,000 per month.

A) $540,000
B) $260,000
C) $798,000
D) $1,140,000
E) $280,000

Question 40

The current annual budget for Armstrong Ltd. indicates total revenue of $8,000,000. The total variable costs are $1,600,000 and fixed costs are $5,600,000. Calculate the total sales revenue for the year that would be needed for a profit of $2,750,000.

A) $10,437,500
B) $9,387.500
C) $8,250,000
D) $9,750,000
E) $10,750,000

Question 41

A small company can produce 500 dolls per week. The doll retails for $30. The variable costs are $7.50 per doll and fixed costs are $9,000 per week. How many dolls must be sold each week to produce a net income of $2250?

A) 375 dolls
B) 400 dolls
C) 425 dolls
D) 500 dolls
E) 525 dolls

Question 42

Cliff runs a restaurant in a small town known for its theatres and tourist attractions. Cliff charges an average of $18 per meal. He estimates his variable costs to be $6 per meal and fixed costs are $12,000 per month. Cliff has the capacity to serve 2,000 meals per month. What number of meals must be sold to generate a net income of $7,800?

A) 1,550 meals
B) 1,600 meals
C) 1,700 meals
D) 1,750 meals
E) 1,650 meals

Question 43

Cando Manufacturing makes lamps that retail at $200 each. The unit variable cost is $120, and the fixed costs are $720,000 per year. Cando can produce a maximum of 2,000 lamps per month. What is the monthly net income at a volume of 1800 lamps per month?

A) $76,000
B) $84,000
C) $80,000
D) $88,000
E) $72,000

Question 44

A manufacturing company is studying the feasibility of producing a new product. The selling price is expected to be $80. The new production line would manufacture up to 9,000 units at a variable cost of $15 per unit. Fixed costs would be $150,000. Variable selling and administration expenses would amount to $5. Determine the break-even point as a percent of capacity.

A) 27.78%
B) 28.55%
C) 29.32%
D) 32.45%
E) 41.62%

Question 45

Sherry Tomason is considering the start-up of a delivery company service. She has compiled information on costs as follows: With the cost data provided, determine the fixed costs per month.

A) $5,680
B) $7,130
C) $8,840
D) $3,160
E) $6,640

Question 46

A small company can produce 500 dolls per week. The doll retails for $30. The variable costs are $7.50 per doll and fixed costs are $9,000 per week. How many dolls must be sold each week to produce a net income of $1125?

A) 400 dolls
B) 425 dolls
C) 450 dolls
D) 475 dolls
E) 375 dolls

Question 47

Cando Manufacturing makes lamps that retail at $200 each. The unit variable cost is $120, and the fixed costs are $720,000 per year. Cando can produce a maximum of 2,000 lamps per month. At what percent utilization would the monthly net income be $44,000?

A) 60%
B) 55%
C) 50%
D) 65%
E) 70%

Question 48

Cando Manufacturing makes lamps that retail at $200 each. The unit variable cost is $120, and the fixed costs are $720,000 per year. Cando can produce a maximum of 2,000 lamps per month. What is the monthly net income if Cando operates at 60% capacity?

A) $44,000
B) $84,000
C) $36,000
D) $52,000
E) $28,000

Question 49

Cliff runs a restaurant in a small town known for its theatres and tourist attractions. Cliff charges an average of $18 per meal. He estimates his variable costs to be $6 per meal and fixed costs are $12,000 per month. Cliff has the capacity to serve 2,000 meals per month. What number of meals must be sold to break-even?

A) 1,200 meals
B) 1,400 meals
C) 1,500 meals
D) 1,000 meals
E) 1,250 meals

Question 50

Shannon Vale is considering the start-up of a service company. She has compiled information on costs as follows: With the cost data provided, determine the fixed costs and variable cost per km.

A) Fixed costs: $4425; Variable costs: $1.031
B) Fixed costs: $5,186; Variable costs: $0.818
C) Fixed costs: $6,200; Variable costs: $0.966
D) Fixed costs: $5,726; Variable costs: $0.952
E) Fixed costs: $7,752; Variable costs: $1.048

Question 51

Cando Manufacturing makes lamps that retail at $200 each. The unit variable cost is $120, and the fixed costs are $720,000 per year. Cando can produce a maximum of 2,000 lamps per month. At what percent utilization would the monthly net income be $52,000?

A) 55%
B) 65%
C) 75%
D) 80%
E) 70%

Question 52

Cliff runs a restaurant in a small town known for its theatres and tourist attractions. Cliff charges an average of $18 per meal. He estimates his variable costs to be $6 per meal and fixed costs are $12,000 per month. Cliff has the capacity to serve 2,000 meals per month. At 75% capacity, what is Cliff's net income?

A) $4,800
B) $6,000
C) $7,200
D) $7,800
E) $8,400

Question 53

Anderson Ltd. Manufactured 10,000 units of a product last year and identified the following manufacturing and overhead costs (V denotes variable cost and F denotes fixed cost). If variable cost and fixed costs remain unchanged, calculate the total cost to produce 12,000 units.

A) $698,000
B) $699,000
C) $700,000
D) $701,000
E) $702,000

Question 54

Mentis Ltd. Manufactured 350,000 units of a product last year and identified the following manufacturing and overhead costs (V denotes variable cost and F denotes fixed cost). If variable cost and fixed costs remain unchanged, calculate the total cost to produce 385,000 units.

A) $39,970,000
B) $40,170,000
C) $41,370,000
D) $43,670,000
E) $44,440,000

Question 55

Cando Manufacturing makes lamps that retail at $200 each. The unit variable cost is $120, and the fixed costs are $720,000 per year. Cando can produce a maximum of 2,000 lamps per month. What is the break-even volume per month?

A) 750 lamps
B) 800 lamps
C) 900 lamps
D) 1,000 lamps
E) 600 lamps

Question 56

A small company can produce 500 dolls per week. The doll retails for $30. The variable costs are $7.50 per doll and fixed costs are $9,000 per week. If fixed costs are increased by 10% per week, by how much will this lower the net income?

A) $750
B) $1,000
C) $1250
D) $800
E) $900

Question 57

Juniper Ltd. Manufactured 98,000 units of a product last year and identified the following manufacturing and overhead costs (V denotes variable cost and F denotes fixed cost). If variable cost and fixed costs remain unchanged, calculate the total cost to produce 62,000 units.

A) $1,286,000
B) $1,486,000
C) $1,686,000
D) $1,976,000
E) $2,076,000

Question 58

Mike Babchuck is considering the start-up of a service company. He has compiled information on costs as follows: With the cost data provided, determine the variable cost per km.

A) $1.348
B) $1.161
C) $1.087
D) $1.031
E) $0.825

Question 59

Cliff runs a restaurant in a small town known for its theatres and tourist attractions. Cliff charges an average of $18 per meal. He estimates his variable costs to be $6 per meal and fixed costs are $12,000 per month. Cliff has the capacity to serve 2,000 meals per month. What is the break-even point expressed as a percent of capacity?

A) 75%
B) 80%
C) 50%
D) 60%
E) 70%

Question 60

Cliff runs a restaurant in a small town known for its theatres and tourist attractions. Cliff charges an average of $18 per meal. He estimates his variable costs to be $6 per meal and fixed costs are $12,000 per month. Cliff has the capacity to serve 2,000 meals per month. At full capacity, what is Cliff's net income?

A) $12,000
B) $10,000
C) $15,000
D) $7500
E) $14,500

Question 61

A manufacturing company is studying the feasibility of producing a new product. The selling price is expected to be $56. The new production line would manufacture up to 95,000 units at a variable cost of $35 per unit. Fixed costs would be $400,000. Variable selling and administration expenses would amount to $7. Determine operating income at 95% capacity.

A) $863,500
B) $874,500
C) $885,500
D) $895,500
E) $905,500

Question 62

Use the graphical approach to CVP analysis to solve the following problem.
Home Security Systems Inc. assembles and packages home security systems from brand-name components. Its basic home security system is sold to customers who prefer to install the system themselves in their own home. Each system is assembled from components costing $1400 per system and sells for $2,000. Labour costs for assembly are $100 per system. This product line's share of overhead costs is $10,000 per month.
a) How many basic security systems must be sold each month to break even on this product line?
b) What will be the profit or loss for a month in which 15 basic home security systems are sold?

Question 63

Use the graphical approach to CVP analysis to solve the following problem.
Jordan is developing a business plan for a residential building inspection service he wants to start up. Rent and utilities for an office would cost $1,000 per month. The fixed costs for a vehicle would be $450 per month. He estimates that the variable office costs (word processing and supplies) will be $50 per inspection and variable vehicle costs will be $25 per inspection. Jordan would also spend $200 per month to lease a computer, and $350 per month for advertising.
a) If he charges $275 per inspection, how many inspections per month are required before he can "pay himself?"
b) How many inspections per month are required for Jordan to be able to draw a salary of $4,000 per month?

Question 64

A manufacturing company is studying the feasibility of producing a new product. The selling price is expected to be $100. The new production line would manufacture up to 42,000 units at a variable cost of $67 per unit. Fixed costs would be $580,000. Variable selling and administration expenses would amount to $12. Determine operating income at 80% of capacity.

A) $124,700
B) $125,600
C) $126,500
D) $127,400
E) $128,300

Question 65

The Kelowna division of Windstream RVs builds the Wanderer model. The division had total revenue of $4,785,000 and a profit of $520,000 on the sale of 165 units in the first half of its financial year. Sales declined to 117 units in the second half of the year, resulting in a profit of only $136,000. Determine the selling price per unit, the total revenue in the second half, the unit variable costs, and the annual fixed costs.

Question 66

Samantha manufactures rings which sell in her boutique for $60 each. For 100 rings, the material cost is $15 each, and estimated fixed costs are $900. How many rings must Larissa sell to beak-even?

Question 67

Use the graphical approach to CVP analysis to solve the following problem.
Canada Bagel Company manufactures packages of bagels that it sells for $2.50. The variable costs per package are $1.00.
a) To just break even, how many packages of bagels must be sold per month if the fixed costs are $60,000 per month?
b) What must unit sales be in order to have a profit of $7,500 per month?

Question 68

A manufacturing company is studying the feasibility of producing a new product. The selling price is expected to be $24. The new production line would manufacture up to 19,500 units at a variable cost of $7.80 per unit. Fixed costs would be $72,500. Variable selling and administration expenses would amount to $2.20. Determine the units needed to earn operating income of $75,000.

A) 14,970
B) 13,869
C) 12,758
D) 11,647
E) 10,536

Question 69

A new product is expected to sell for $20. The company would manufacture up to 46,500 units at a variable cost of $8 per unit. Fixed costs would be $220,000. Variable selling and administration expenses would amount to $3. Determine the contribution margin per unit and contribution margin rate.

A) Per unit CM $9.00; CM rate = .45
B) Per unit CM $9.50; CM rate = .47
C) Per unit CM $9.75; CM rate = .49
D) Per unit CM $10.00; CM rate = .51
E) Per unit CM $10.50; CM rate = .53

Question 70

Use the graphical approach to CVP analysis to solve the following problem.
Huntsville Office Supplies (HOS) is evaluating the profitability of leasing a photocopier for its customers to use on a self-serve basis at 10¢ per copy. The copier may be leased for $300 per month plus 1.5¢ per copy on a full-service contract. HOS can purchase paper at $5 per 500-sheet ream. Toner costs $100 per bottle, which in normal use will last for 5,000 pages. HOS is allowing for additional costs (including electricity) of 0.5¢ per copy.
a) How many copies per month must be sold in order to break even?
b) What will be the increase in monthly profit for each 1,000 copies sold above the break-even point?

Question 71

A manufacturing company is studying the feasibility of producing a new product. The selling price is expected to be $7. The new production line would manufacture up to 19,250 units at a variable cost of $1.85 per unit. Fixed costs would be $50,000. Variable selling and administration expenses would amount to $1.15. Determine the dollar sales needed to earn operating loss of $4,000.

A) $81,000
B) $80,500
C) $80,000
D) $79,500
E) $79,000

Question 72

A manufacturing company is studying the feasibility of producing a new product. The selling price is expected to be $75. The new production line would manufacture up to 150,000 units at a variable cost of $47 per unit. Fixed costs would be $975,000. Variable selling and administration expenses would amount to $15. Determine the break-even point as a percent of capacity.

A) 30%
B) 40%
C) 50%
D) 60%
E) 70%

Question 73

A manufacturing company is studying the feasibility of producing a new product. The selling price is expected to be $18.50. The new production line would manufacture up to 14,500 units at a variable cost of $6.25 per unit. Fixed costs would be $34,000. Variable selling and administration expenses would amount to $3. Determine the dollar sales needed to earn operating loss of $2,500.

A) $66,000
B) $65,000
C) $64,000
D) $63,000
E) $62,000

Question 74

A manufacturing company is studying the feasibility of producing a new product. The selling price is expected to be $105. The new production line would manufacture up to 825,000 units at a variable cost of $64 per unit. Fixed costs would be $1,515,000. Variable selling and administration expenses would amount to $18. Determine the units needed to earn operating income of $4,000,000.

A) 241,571
B) 166,276
C) 527,685
D) 239,783
E) 313,913

Question 75

The Woodstock plant of Goodstone Tires manufactures a single line of automobile tires. In its first fiscal quarter, the plant had total revenue of $4,500,000 and net income of $900,000 from the production and sale of 60,000 tires. In the subsequent quarter, the net income was $700,000 from the production and sale of 50,000 tires. Calculate the unit selling price, the total revenue in the second quarter, the variable costs per tire, and the total fixed costs per calendar quarter.

Question 76

Use the Texas Instruments BAII plus break-even worksheet to solve the following.
Recall:
FC: total fixed costs
VC: Variable costs per unit
P: Selling price per unit (S in textbook)
PFT: Profit or Net Income
Q: Number of units sold (x in textbook)
Toys-4-U manufactures a toy that it sells for $65.00 each. The variable cost per toy is $15 and the fixed costs for this product line are $250,000 per year. What number of sales would generate a profit of $5000?

Question 77

Once a business is operating beyond the break-even point, why doesn't each additional dollar of revenue add a dollar to net income?

Question 78

Dynacan Ltd. manufactured 10,000 units of product last year and identified the following manufacturing and overhead costs. (V denotes "variable cost" and F denotes "fixed cost.")
If unit variable costs and fixed costs remain unchanged, calculate the total cost to produce 9700 units this year.

Question 79

A new product is expected to sell for $12. The company would manufacture up to 22,000 units at a variable cost of $5 per unit. Fixed costs would be $150,000. Variable selling and administration expenses would amount to $2.50. Determine the contribution margin per unit and contribution margin rate.

A) Per unit CM $4.50; CM rate = .375
B) Per unit CM $5.50; CM rate = .395
C) Per unit CM $6.50; CM rate = .415
D) Per unit CM $7.50; CM rate = .435
E) Per unit CM $8.50; CM rate = .455

Question 80

Triax Corp. produced 50,000 gizmos at a total cost of $1,600,000 (including $400,000 of fixed costs) in the fiscal year just completed. If fixed costs and unit variable costs do not change next year, how much will it cost to produce 60,000 gizmos?