Reference no: EM132967923

The following data pertain to activity and costs for two months:

                                                     June                   July
Activity level in units             10,000                20,000
Variable costs                       $20,000                    ?
Fixed costs                            15,000                      ?
Mixed costs                             10,000                        ?
Total costs                            $45,000                      $70,000

Problem 1: Assuming that these activity levels are within the relevant range, what were the mixed costs for July?

Select one:
a. $35,000.
b. $40,000.
c. $10,000.
d. $15,000.

Problem 2: A company has sales of $87,500 at the break-even point and fixed costs are $35,000. Assuming cost behaviour does not change if sales increase by $20,000 how much will operating income will increase by?

Select one:
a. $12,000.00.
b. $20,000.00.
c. $4,000.00.
d. $8,000.00.