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118.      If fixed expenses were the same and contribution margin per unit was cut in half, then the break even point would:

     a.     be cut in half
     b.     double
     c.     be the same
     d.     be undeterminable


119.     The following information is for Albion Corporation:

               Total fixed costs      $313,500
               Variable costs per unit      $99
               Selling price per unit      $154

     If management has a targeted net income of $46,200 (ignore income taxes), then the number of units that must be sold is:

     a.     2,036 units
     b.     2,336 units
     c.     5,700 units
     d.     6,540 units


120.     The following information is for Center Corporation:

               Total fixed costs      $313,500
               Variable costs per unit      $99
               Selling price per unit      $154

     If management has a targeted net income of $59,400 (ignore income taxes), then sales revenue should be:

     a.     $580,067
     b.     $1,044,120
     c.     $239,721
d.     $671,220

 

121.     The following information is for Allen Corporation:

               Total fixed costs      $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%

122.     The following information is for Joshua Corporation:

               Total fixed costs      $333,500
               Variable costs per unit      $99
               Selling price per unit      $154

     If total fixed costs increased to $394,850, then break-even volume in dollars would increase by:

     a.     10.0%
     b.     12.3%
     c.     18.4%
     d.     34.3%


123.      Assume the following cost information for Melissa Company:

               Selling price per unit      $144      
               Variable costs per unit      $80
               Total fixed costs      $80,000
               Tax rate      40%

     


 

     a.     $216,000
     b.     $252,000
     c.     $270,000     
     d.     $315,000


124.      Assume the following cost information for Zachary Company:

               Selling price per unit      $144      
               Variable costs per unit      $80
               Total fixed costs      $80,000
               Tax rate      40%

     


 

     a.     3,700 units
     b.     2,313 units
     c.     1,594 units
     d.     1,063 units

125.      Assume the following cost information for Donald Company:

               Selling price per unit      $144      
               Variable costs per unit      $95
               Total fixed costs      $80,000
               Tax rate      40%

     The break-even point in units is

     a.     500 units
     b.     556 units
     c.     1,000 units     
     d.     1,633 units


126.      Assume the following cost information for Marie Company:

               Selling price per unit      $144      
               Variable costs per unit      $80
               Total fixed costs      $80,000
               Tax rate      40%

     If fixed costs increased by 10% and management wanted to maintain the original break-even point, then the selling price per unit would have to be increased to:

     a.     $158.40
     b.     $208.00
     c.     $150.40
     d.     $155.20


127.      The


 

     a.     incremental effect
     b.     detrimental effect
     c.     conditional effect
     d.     comparability effect


128.      Given a break even point of 88,000 units and a contribution margin per unit of $9.60, the total number of units that must be sold to reach a net pretax profit of $18,096 is:

     a.     89,885 units     
     b.     88,000 units
     c.     1,885 units     
     d.     indeterminable


129.      As sales exceed the break even point, a high contribution margin percentage:

     a.     increases profits faster than does a low contribution margin percentage
     b.     increases profits at the same rate as a low contribution margin percentage
     c.     decreases profits at the same rate as a low contribution margin percentage
     d.     increases profits slower than does a low contribution margin percentage

130.     


 

     a.     Contribution margin
     b.     Break-even point
     c.     Operating leverage
     d.     The margin of safety

131.      Which of the following statements about highly leveraged companies is true?

     a.     Fixed costs are high and variable costs are low.
     b.     Large changes in sales volume result in larger changes in net income.
     c.     There is a higher possibility of net income or net loss and therefore more risk than a highly leveraged firm.
     d.     All of these answers are correct.

132.      If the sales price per unit is $180, variable cost per unit is $96, targeted net income is $52,800, and total fixed costs are $39,600, the number of units that must be sold is:

     a.     513
     b.     629
     c.     963
d.     1,100


133.      If the contribution margin ratio is 0.30, targeted net income is $76,800, and targeted sales volume in dollars is $480,000, then total fixed costs are:

     a.     $23,000
     b.     $44,160
     c.     $67,200
     d.     $144,000


134.      If targeted sales volume in units is 62,300, total fixed costs are $31,200, and      contribution margin per unit is $1.20, then the targeted net income is:

     a.     $31,200
     b.     $43,560
     c.     $37,440
     d.     $74,760

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