Problem 1: The contribution margin ratio is _________.
- the same as the variable cost ratio
- the same as profit
- the portion of equity contributed by the stockholders
- the same as the profit-volume ratio
Problem 2: Halter Inc.'s unit selling price is $70, the unit variable costs are $45, fixed costs are $150,000, and current sales are 10,000 units. How much will operating income change if sales increase by 5,000 units?
- $125,000 decrease
- $175,000 increase
- $75,000 increase
- $125,000 increase
Problem 3: If fixed costs are $450,000, the unit selling price is $75, and the unit variable costs are $50, what are the old and new break-even sales (units) if the unit selling price increases by $5?
- 6,000 units and 5,250 units
- 18,000 units and 6,000 units
- 18,000 units and 15,000 units
- 9,000 units and 15,000 units