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What is the break-even point

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Reference no: EM1377088 , Length: 80 Questions

1. Fixed costs are $1,500,000 and the contribution margin per unit is $150. What is the break-even point?

a. 10,000 units'           b.  $10,000,000      c. 3,750 units         d.       $3,750,000

2. Borehole's Company had actual sales of $800,000 when break-even sales were $600,000. What is the margin of safety ratio?

a. 75%                      b. 33%                     c. 67%                d. 25%    

3. How much sales are required to earn a target income of $80,000 if total fixed costs are $100,000 and the contribution margin ratio is 40%?

a. $300,000     b.  $450,000            c. $200,000                 d. $330,000                    

4. Clark Company had a contribution margin of $500,000 and a contribution margin ratio of 40%, total variable costs must have been

a. $200,000.00            b. $300,000.00                  c. $1,250,000.00   d. $750,000.00

5. Garland's Company's cost of goods sold is $350,000 variable and $200,000 fixed. The company's selling and administrative expenses are $250,000 variable and $300,000 fixed. If the company's sales are $1,400,000, what is its contribution margin?

a. $300,000     b.  $850,000             c. $800,000                 d. $900,000       

6. Moschino Company is planning to sell 400,000 hammers for $1.50 per unit. The contribution margin ratio is 20%. If Dolce will break even at this level of sales, what are the fixed costs?

a. $280,000             b. $120,000               c. $400,000        d. $480,000         

7. Johnson Company produces flash drives for computers, which it sells for $20 each. Each flash drive costs $12 of variable costs to make. During April, 1,000 drives were sold. Fixed costs for March were $2 per unit for a total of $1,000 for the month. How much is the contribution margin ratio?

a. 30%                                     b. 60%               c. 40%                   d. 70%    

8. In 2008, Norris sold 3,000 units at $500 each. Variable expenses were $350 per unit, and fixed expenses were $200,000. The same selling price, variable expenses, and fixed expenses are expected for 2009. What is Norris's break-even point in units for 2009?

a. 3,000                                   b. 1,333               c. 4,285               d. 6,667 

9. Gautier's CVP income statement included sales of 2,000 units, a selling price of $100, variable expenses of $60 per unit, and fixed expenses of $44,000. Contribution margin is:

a. $200,000.00     b. $120,000.00          c. $36,000.00     d.   $80,000.00

10. Reese Company requires sales of $2,000,000 to cover its fixed costs of $700,000 and to earn net income of $500,000. What percent are variable costs of sales?

a. 25%             b. 35%                     c. 40%             d. 60%  

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Reference no: EM1377088

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