Reference no: EM132598007

Question 1. The amount of a unit's sales price that helps to cover fixed expenses is its ________.

a. contribution margin

b. profit

c. variable cost

d. stepped cost

Question 2. A company's product sells for birr 150 and has variable costs of birr 60 associated with the product. What is its contribution margin per unit?

a. Birr 40

b. Birr 6o

c. Birr 90

d. Birr 150

Question 3. A company's product sells for birr 150 and has variable costs of birr 60 associated with the product. What is its contribution margin ratio?

a. Birr 10

b. Birr 40

c. Birr 60

d. Birr 90

Question 4. A company's contribution margin per unit is $25. If the company increases its activity level from 200 units to 350 units, how much will its total contribution margin increase?

a. $1,250

b. $3,750

c. $5,000

d. $8,750

Question 5. A company sells its products for $80 per unit and has per-unit variable costs of $30. What is the contribution margin per unit?

a. $30

b. $50

c. $80

d. $110

Question 6. If a company has fixed costs of $6,000) per month and their product that sells for $200) has a contribution margin ratio of 30%), how many units must they sell in order to break even?

a. 100

b. 180

c. 200

d. 2,000

Question 7. Company A wants to earn $5,000 profit in the month of January. If their fixed costs are $10,000) and their product has a per-unit contribution margin of $250, how many units must they sell to reach their target income?

a. 20

b. 40

c. 60

d. 120