Superb Professors

• Question 1 0 out of 5 points CMA, Inc. produces a product that has a variable cost of $2.50 per unit. The company’s fixed costs are $30,000. The product is sold for $5.00 per unit and the company desires to earn a target profit of $10,000. What amount of sales that will be necessary to earn the desired profit? • Question 2 0 out of 5 points At its $25 selling price, Paciolli Company has sales of $10,000, variable manufacturing costs of $4,000, fixed manufacturing costs of $1,000, variable selling and administrative costs of $2,000 and fixed selling and administrative costs of $1,000. What is the company’s contribution margin per unit? • Question 3 0 out of 5 points Lucy Treasures operates a chain of gift shops. The company pays liability insurance premiums of $2,500 per year for each shop. The managers of each shop are paid a salary of $3,000 per month and all other employees are paid on an hourly basis. Relative to the number of shops, the cost of insurance is which kind of cost? • Question 4 0 out of 5 points Select the correct statement regarding fixed costs. • Question 5 0 out of 5 points For Hico Bottling Company, the salespersons’ commissions are an example of • Question 6 0 out of 5 points Byrnes Company currently produces and sells 4,000 units of a product that has a contribution margin of $6 per unit. The company sells the product for a sales price of $20 per unit. Fixed costs are $18,000. The company has recently invested in new technology and expects the variable cost per unit to fall to $8 per unit. The investment is expected to increase fixed costs by $15,000. Before the new investment was made, how many units had to be sold to breakeven? • Question 7 0 out of 5 points Based on the following cost data, items labeled (a) and (b) in the table below represent which of the following amounts, respectively? • Question 8 0 out of 5 points Felix Company produces a product that has a selling price of $12.00 and a variable cost of $9.00 per unit. The company’s fixed costs are $60,000. What is the breakeven point measured in sales dollars? • Question 9 0 out of 5 points For Hico Bottling Company, the production manager’s salary is an example of • Question 10 0 out of 5 points Based on the income statements shown below, which division has the lowest operating leverage? • Question 11 0 out of 5 points The following income statements are provided for two companies operating in the same industry Assuming sales increase by $1,000, select the incorrect statement from the following: • Question 12 0 out of 5 points Two different costs incurred by Winton Company exhibit the following behavior pattern per unit: Cost #1 and Cost #2 exhibit which of the following cost behavior patterns, respectively? • Question 13 0 out of 5 points For the last two years, Barton Company had net income as follows: What was the percentage change in income from 2009 to 2010? • Question 14 0 out of 5 points The following income statement is provided for Fornes Company in 2012: What amount was the company’s contribution margin? • Question 15 0 out of 5 points Pattillo Industries makes a product that sells for $25 a unit. The product has a $5 per unit variable cost and total fixed costs of $9,000. At budgeted sales of 1,000 units, the margin of safety percentage is • Question 16 0 out of 5 points The following information is provided for Steinfeld Company: What is this company’s contribution margin? • Question 17 0 out of 5 points Whitney Company pays its sales staff a base salary of $5,000 a month plus a $2.00 commission for each unit of product sold. If a salesperson sells 500 units of product in January, the employee would be paid • Question 18 0 out of 5 points Java Joe’s operates a chain of coffee shops. The company pays rent of $12,000 per year for each shop. Supplies (napkins, bags and condiments) are purchased as needed. The manager of each shop is paid a salary of $2,000 per month, and all other employees are paid on an hourly basis. Relative to the number of customers for a shop, the cost of rent is which kind of cost? • Question 19 0 out of 5 points Mendez Company currently produces and sells 20,000 units of product at a selling price of $10. The product has variable costs of $4 per unit and fixed costs of $50,000. The company currently earns a total contribution margin of • Question 20 0 out of 5 points The following income statement is provided for Ortiz, Inc. What is this company’s magnitude of operating leverage? • Question 21 0 out of 5 points Shadow Lake Bottling Company produces a soft drink that is sold for a dollar. The company pays $500,000 in production costs, half of which are fixed costs. General, selling, and administrative costs amount to $200,000 of which $50,000 are fixed costs. Assuming production and sales of 800,000 units, what is the amount of contribution margin per unit?

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