Marsh Company has current sales of 6,000 units. The company determined that unit sales could drop by 1,000 units before the company experiences a loss. Which statement is true?
The contribution margin in units is 1,000.The breakeven point is 0.The breakeven point is 5,000 units.Unit sales are less than the breakeven sales.
Paper Pro sells one finger staplers for $15. The variable cost per stapler is $8.55 and total fixed costs are $22,962 per month. What is the contribution margin per unit for each stapler?
Use the information in question 70. What is the contribution margin ratio?
Use the information in question 70. What is the breakeven point in units?
Use the information in question 70. If an increase in aluminum causes the variable cost per unit to increase to $9.00, how many additional units must be sold to breakeven?
Sanders Company sells beach buckets for $3.00 each. The results of last month’s operations are as follows:
Cost of goods sold 2,400
Gross profit 2,100
Fixed operating costs 1,610
Operating income$ 490
What is Sanders’ monthly breakeven point in sales dollars?
If contribution margin per unit is $5 and fixed costs are $5,000 and target operating income is $6,500, how many units will the company need to sell to meet target operating income?
Chatham Wine produces wine chillers that its sells for $300 each. Its variable costs are $120 per unit. Chatham incurs $40,000 in fixed costs during the year. During 2010, the company sold 300 units. How much is the degree of operating leverage for Chatham Wine?
Deco Donuts produces two varieties of donuts—cinnamon and spice, and has experienced a stable sales mix in the past. July information follows:CinnamonSpiceTotalsDonuts sold60,00080,000140,000Sales revenue$240,000$160,000$400,000Variable costs136,20088,800225,000Fixed costs 43,700 28,835 72,535Net operating income$ 60,100$ 42,365$102,465
How many spice donuts will Deco sell at breakeven assuming there is no change in sales mix?
Which of the following describes the behavior of fixed costs?
The unit cost increases when the activity level increases.
The total cost changes with the activity level.The unit cost stays the same over changing levels of activity.The total cost stays the same when activity declines.
Marshal, Inc.’s accountant determined the company could eliminate the $200 weekly lunch catering cost provided to department managers during the weekly meetings. What type of cost are the catering costs considered?
Committed fixed costsDiscretionary fixed costsStep costsVariable costs