1) The Dean Company has sales of $500,000 and the break-even point in sales dollars of $300,000. Determine the company's margin of safety.
a) 45%
b) 43%
c) 40%
d) 55%
2) The Tom Company reports the following data. Determine Tom Company's operating leverage.
Sales $600,000
Variable costs $400,000
Fixed Costs $100,000
a) 2.0
b) 3.5
c) 4.2
d) 5.0
3)The manufacturing cost of Mocha Industries for three months of the year are provided below. Using the high-low method, determine a) variable cost per unit, b) the total fixed costs.
Total Cost Production
April $63,100 1,200 units
May 80,920 1,800
June 100,300 2,400
a) 44 and 52,000
b) 31 and 25,900
c) 20 and 30,000
d) 13 and 22,000