Question 1 (2 points)

 

 

If variable costs increase, fixed costs increase, and sales remain the same, what is expected to happen to the Contribution Margin (CM) and to the Break-even Point (BE) respectively?

Question 1 options:

	CM: Decrease BE: Increase
	CM: Increase BE: Decrease
	CM: Decrease BE: Decrease
	CM: Decrease BE: Can’t be determined

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Question 2 (3 points)

 

 

The break-even point is the point at which

Question 2 options:

	fixed costs equal variable costs
	fixed costs equal sales
	total contribution margin equals fixed costs
	sales equals variable costs

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Question 3 (3 points)

 

 

Singer Co. reported sales of $416,000, a contribution margin of $5 per unit, fixed costs of $80,000, and a net income of $24,000. Determine the selling price per unit?

Question 3 options:

	$26
	$20
	$86.70
	$5

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Question 4 (3 points)

 

 

Use the following information to answer questions 4 & 5 
Projected cost information for a new product is as follows:

Variable manufacturing costs:	$8 per unit
Variable selling costs:	$2 per unit
Fixed manufacturing costs:	$25,000
Fixed selling costs:	$45,000

The product is to be sold at $18 per unit.

Determine the break-even point for this product (in $)

Question 4 options:

	$45,000
	$126,000
	$157,500
	$8,750

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Question 5 (3 points)

 

 

Use the following information to answer questions 4 & 5 
Projected cost information for a new product is as follows:

Variable manufacturing costs:	$8 per unit
Variable selling costs:	$2 per unit
Fixed manufacturing costs:	$25,000
Fixed selling costs:	$45,000

The product is to be sold at $18 per unit.

What price would the company have to sell this product for if they wish to sell 10,000 units and realize a profit of $50,000?

Question 5 options:

	$18
	$22
	$12
	$5

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Question 6 (3 points)

 

 

Gastone Inc. has estimated the following forecasted sales for a 3-month period:

Month	Estimated sales $
August	33,000
September	29,000
October	30,000

On average, 60% of sales are collected in the month of sale, 39% in the following month, and the remaining 1% is never collected. Determine the budgeted cash receipts for September.

Question 6 options:

	$29,000
	$30, 270
	$31,110
	$29,100

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Question 7 (3 points)

 

$45,000 and $10,000