A company sells a product which has a unit sales price of $5, unit variable cost

Question

A company sells a product which has a unit sales price of $5, unit variable cost of $3 and total fixed costs of $150,000. The number of units the company must sell to break even is Answer A. 50,000 units. B. 30,000 units. C. 75,000 units. D. 300,000 units. 2.5 points Question 15 At the high level of activity in November, 7,000 machine hours were run and power costs were $18,000. In April, a month of low activity, 2,000 machine hours were run and power costs amounted to $9,000. Using the high-low method, the estimated fixed cost element of power costs is Answer A. $9,000. B. $18,000. C. $12,600. D. $5,400. 2.5 points Question 16 Within the relevant range, the variable cost per unit Answer A. remains constant at each activity level. B. differs at each activity level. C. decreases as production increases. D. increases as production increases. 2.5 points Question 17 CVP analysis is not important in Answer A. setting selling prices. B. determining the product mix. C. utilizing production facilities. D. calculating depreciation expense. 2.5 points Question 18 The contribution margin ratio increases when Answer A. variable costs as a percentage of sales decrease. B. fixed costs increase. C. variable costs as a percentage of sales increase. D. fixed costs decrease. 2.5 points Question 19 Konerko Company sells two types of computer chips. The sales mix is 30% (Q-Chip) and 70% (Q-Chip Plus). Q-Chip has variable costs per unit of $36 and a selling price of $60. Q-Chip Plus has variable costs per unit of $42 and a selling price of $78. The weighted-average unit contribution margin for Konerko is Answer A. $32. B. $30. C. $60. D. $28. 2.5 points Question 20 A CVP graph does not include a Answer A. sales line. B. variable cost line. C. fixed cost line. D. total cost line. 2.5 points Question 21 A shift from low-margin sales to high-margin sales Answer A. may increase net income, even though there is a decline in total units sold. B. will always decrease net income. C. will always decrease units sold. D. will always increase net income. 2.5 points Question 22 The equation which reflects a CVP income statement is Answer A. Sales + Fixed costs = Variable costs + Net income. B. Sales

Explanation / Answer

A. 50,000 units. B. $18,000. A. $9,000

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