Question 1

Mustang Corp.has a selling price of $15,variable costs of $10 per unit,and fixed costs of $35,000.How many units must be sold to break-even?

Accepted Answer

A)  7,000
B)  14,000
C)  3,500
D)  2,334E) C) and D)
F) A) and B)

Question 2

A company is debating whether to change its cost structure so that fixed costs increase from $300,000 to $400,000,but variable costs decrease from $5 per unit to $4 per unit.If it were to implement the change at its current production level of 100,000 units,profit would not change.What would happen to the company's profit if the change were implemented and production increased to 125,000 units?

Accepted Answer

A)  It will stay the same.
B)  It will increase.
C)  It will decrease.
D)  It could increase or decrease.E) B) and C)
F) A) and B)

Question 3

Martol,Inc.has fixed costs of $200,000 and a contribution margin ratio of 40%.How much sales revenue must be earned for a profit of $80,000?

Accepted Answer

A)  $140,000
B)  $560,000
C)  $700,000
D)  $1,120,000E) C) and D)
F) A) and B)

Exam 6: Cost-Volume-Profit Analysis

Mustang Corp.has a selling price of $15,variable costs of $10 per unit,and fixed costs of $35,000.How many units must be sold to break-even?

Correct Answer
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Martol,Inc.has fixed costs of $200,000 and a contribution margin ratio of 40%.How much sales revenue must be earned for a profit of $80,000?

Correct Answer
verified

Correct Answer
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Exam 6: Cost-Volume-Profit Analysis

Mustang Corp.has a selling price of $15,variable costs of $10 per unit,and fixed costs of $35,000.How many units must be sold to break-even?

Correct AnswerverifiedShow Answer

Martol,Inc.has fixed costs of $200,000 and a contribution margin ratio of 40%.How much sales revenue must be earned for a profit of $80,000?

Correct AnswerverifiedShow Answer

Correct AnswerverifiedShow Answer

Correct Answer
verified

Correct Answer
verified

Correct Answer
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