Reference no: EM13824025
1. At the high level of activity in August, 7,000 machine hours were run and power costs were $16,000. In April, a month of low activity, 3,000 machine hours were run and power costs amounted to $8,000. Using the high-low method, what is the estimated fixed cost element of power costs?
$2,000.
$8,000.
$14,000.
$16,000.
2. A company sells a product which has a unit sales price of $5, unit variable cost of $2 and total fixed costs of $180,000. What is the number of units the company must sell to break even?
36,000 units
60,000 units
90,000 units
540,000 units
3. A Company has a contribution margin per unit of $21 and a contribution margin ratio of 60%. How much is the selling price of each unit?
$12.60
$35.00
$50.00
$52.50
4. How much sales are required to earn a target net income of $160,000 if total fixed costs are $300,000 and the contribution margin ratio is 40%.
$500,000
$750,000
$766,667
$1,150,000
5. A Company produces drives for computers, which it sells for $20 each. Each drive costs $15 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?
20%
25%
75%
80%
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