1.)Harvey's variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $33,000. If sales are expected to increase $60,000, by how much will the company's net income increase?
A. $27,000
B. $42,000
C. $9,000
D. $18,000
2.)Innova Discs has two divisions-Standard and Premium. Each division has hundreds of different types of golf discs and disc golf products. The following information is available: Standard Division Premium Division Total Sales $400,000 $600,000 $1,000,000 Variable costs 280,000 360,000 Contribution margin $120,000 $240,000 Total fixed costs $270,000Reference: Ref 6-3 What is the break-even point in dollars?
A. $771,429
B. $794,118
C. $97,200
D. $750,000
3.)Richert Company's activity for the first three months of 2011 are as follows: Machine Hours Electrical Cost January 2,100 $4,800 February 2,600 $5,800 March 2,900 $6,400 Using the high-low method, how much is the cost per machine hour?
A. $2.26
B. $2.00
C. $3.00
D. $1.78
4.) In 2010, Logan sold 1,000 units at $500 each, and earned net income of $50,000. Variable expenses were $300 per unit, and fixed expenses were $150,000. The same selling price is expected for 2011. Logan's variable cost per unit will rise by 10% in 2011 due to increasing material costs, so they are tentatively planning to cut fixed costs by $15,000. How many units must Logan sell in 2011 to maintain the same income level as 2010?
A. 1,088
B. 971
C. 1,176
D. 794
5.) In applying the high-low method, what is the fixed cost? Month Miles Total Cost January 80,000 $144,000 February 50,000 120,000 March 70,000 141,000 April 90,000 195,000
A. $75,000
B. $54,000
C. $26,250
D. $21,000