1. Randy's Tireland makes a product that sells for $62 per unit and has $49 per unit in variable costs. Annual fixed costs are $24,000. If Rambles sells 10 units less than breakeven, how much loss would the company recognize on its income statement? (As the question asks "how much loss" you don't have to put the negative sign. For example, suppose the loss was 100, then write the answer as 100 rather than -100.)
2. Ritz furniture has a contribution margin ratio of 0.10. If fixed costs are $174,800, how many dollars of revenue must the company generate in order to reach the break-even point?
3. U.S. telephone cellular sells phones for $100.00. The unit variable cost per phone is $50 plus a selling commission of 10% (based on the unit sales price per phone). Fixed manufacturing costs total $1,120 per month, while fixed selling and administrative costs total $2,270. How many phones must be sold to achieve the breakeven point?
4. Abagail Corp. uses activity-based costing system with three activity cost pools. The following information is provided:
Costs: Wages and salaries $ 200,000
Depreciation 103,000
Utilities 118,000
Total $440,000
Activity Cost Pools
Assembly Setting Up Other
Wages & Salaries 0.58 30% 10%
Depreciation 0.36 45% 20%
Utilities 0.28 40% 30%
How much total cost would be allocated to the Assembly activity cost pool?