Question 1: As the cost driver activity level decreases within the relevant range:
a) total fixed costs increase
b) fixed costs per unit decreases
c) total variable costs decrease
d) variable costs per unit decreases
Question 2. The following information is for Allen Corporation:
Total Fixed Cost $313,500
Variable costs per unit $101
Selling price per unit $163
The contribution-margin ratio is:
a) 35.7%
b) 38.0%
c) 55.6%
d) 64.3%
Question 3. Desks R' Us Corporation sells desks at $480 per desk. The costs associated with each desk are as follows:
Direct Materials $195
Direct labor 126
Variable factory overhead 51
Total fixed costs for the period are $456,840. The break-even point in desks is:
a)952 desks
b)1,228 desks
c)4,230 desks
d)5,458 desks
Question 4. On Fire Company, a producer of salsa, has the following information:
Income tax rate 30%
Selling price per unit $5.00
Variable cost per unit $3.00
Total fixed costs $90,000.00
The contribution margin per unit is:
a)$2.00
b)$3.00
c)$5.00
d)$8.00