CostBehav

iorandCost
-Vol
ume-
Prof
itAnal
ysi
s 19. Ami
xedcosthaschar
act
eri
sti
csofbot
hav
ari
abl
eandaf
ixedcost
.T

20. Rent
alchar
gesof$40,
000pery
earpl
us$3f
oreachmachi
nehourov
er

18,
000hour
sisanex
ampl
eofaf
ixedcost
.F

TRUE/
FALSE
21. Ar
ent
alcostof$20,
000pl
us$.
70permachi
nehourofusei
sanexampl
eof

ami
xedcost
.T

1. Costbehav
iorr
efer
stot
hemet
hodsusedt
oest
imat
ecost
sforusei
n 22. Forpur
posesofanal
ysi
s,mi
xedcost
scangener
all
ybesepar
atedi
ntot
hei
r

manager
ial
deci
sionmaki
ng.F v
ari
abl
eandf
ixedcomponent
s.T

2. Costbehav
iorr
efer
stot
hemanneri
nwhi
chacostchangesast
her
elat
ed 23. Thecont
ri
but
ionmar
ginr
ati
oist
hesameast
hepr
ofi
t-
vol
umer
ati
o.T

act
ivi
tychanges.T
24. Var
iabl
ecost
sasaper
cent
ageofsal
esar
eequal
to100%mi
nust
he

3. Thef
ixedcostperuni
tvar
ieswi
thchangesi
nthel
evel
ofact
ivi
ty. cont
ri
but
ionmar
ginr
ati
o.T

T
25. Thedol
l
arsav
ail
abl
efr
om eachuni
tofsal
est
ocov
erf
ixedcostandpr
ofi
tis

4. Apr
oduct
ionsuper
visor
'ssal
aryt
hatdoesnotv
arywi
tht
henumberofuni
ts t
heuni
tvar
iabl
ecost
.F

pr
oducedi
sanexampl
eofaf
ixedcost
.T
26. Ther
ati
othati
ndi
cat
est
heper
cent
ageofeachsal
esdol
l
arav
ail
abl
eto

5. Di
rectmat
eri
alscostt
hatv
ari
eswi
tht
henumberofuni
tspr
oducedi
san cov
ert
hef
ixedcost
sandt
opr
ovi
deoper
ati
ngi
ncomei
ster
medt
he

exampl
eofaf
ixedcostofpr
oduct
ion.F cont
ri
but
ionmar
ginr
ati
o.T

6. I
nor
dert
ochooset
hepr
operact
ivi
tybasef
oracost
,manager
ial 27. I
fsal
est
otal
$2,
000,
000,
fixedcost
stot
al$800,
000,
andv
ari
abl
ecost
sar
e

account
ant
smustbef
ami
l
iarwi
tht
heoper
ati
onsoft
heent
it
y.T 60%ofsal
es,
thecont
ri
but
ionmar
ginr
ati
ois60%.F-40%

7. Ther
elev
antr
angei
susef
ulf
oranal
yzi
ngcostbehav
iorf
ormanagement 28. I
fsal
est
otal
$2,
000,
000,
fixedcost
stot
al$800,
000,
andv
ari
abl
ecost
sar
e

deci
sion-
maki
ngpur
poses.T 60%ofsal
es,
thecont
ri
but
ionmar
ginr
ati
ois40%.T

8. Ther
elev
antact
ivi
tybasef
oracostdependsuponwhi
chbasei
smost 29. Thedat
arequi
redf
ordet
ermi
ningt
hebr
eak-
evenpoi
ntf
orabusi
nessar
ethe

cl
osel
yassoci
atedwi
tht
hecostandt
hedeci
sion-
maki
ngneedsof t
otal
est
imat
edf
ixedcost
sforaper
iod,
stat
edasaper
cent
ageofnetsal
es.

management
.T F

9. Ther
angeofact
ivi
tyov
erwhi
chchangesi
ncostar
eofi
nter
estt
o 30. I
ffi
xedcost
sar
e$500,
000andv
ari
abl
ecost
sar
e60%ofbr
eak-
evensal
es,

managementi
scal
l
edt
her
elev
antr
ange.T pr
ofi
tiszer
owhensal
esr
evenuei
s$930,
000.F

10. Tot
alf
ixedcost
schangeast
hel
evel
ofact
ivi
tychanges.F 31. I
ffi
xedcost
sar
e$850,
000andt
heuni
tcont
ri
but
ionmar
gini
s$50,
prof
iti
s

zer
owhen15,
000uni
tsar
esol
d.F
11. Becausev
ari
abl
ecost
sar
eassumedt
ochangei
ndi
rectpr
opor
ti
ont
o

changesi
ntheact
ivi
tyl
evel
,thegr
aphoft
hev
ari
abl
ecost
swhenpl
ott
ed 32. Thepoi
nti
noper
ati
onsatwhi
chr
evenuesandexpi
redcost
sar
eexact
ly

agai
nstt
heact
ivi
tyl
evel
appear
sasaci
rcl
e.F equal
iscal
l
edt
hebr
eak-
evenpoi
nt.T

12. Var
iabl
ecost
sar
ecost
sthatr
emai
nconst
anti
ntot
aldol
l
aramountast
he 33. Br
eak-
evenanal
ysi
sisonet
ypeofcost
-vol
ume-
prof
itanal
ysi
s.T

l
evel
ofact
ivi
tychanges.F
34. I
fthepr
oper
tyt
axr
atesar
eincr
eased,
thi
schangei
nfi
xedcost
swi
l
lresul
tin

13. Var
iabl
ecost
sar
ecost
sthatr
emai
nconst
antonaper
-uni
tbasi
sast
hel
evel adecr
easei
nthebr
eak-
evenpoi
nt.F

ofact
ivi
tychanges.T
35. I
fyear
lyi
nsur
ancepr
emi
umsar
eincr
eased,
thi
schangei
nfi
xedcost
swi
l
l

14. Var
iabl
ecost
sar
ecost
sthatv
aryi
ntot
ali
ndi
rectpr
opor
ti
ont
ochangesi
n r
esul
tinani
ncr
easei
nthebr
eak-
evenpoi
nt.T

t
heact
ivi
tyl
evel
.T
36. I
fempl
oyeesacceptawagecont
ractt
hati
ncr
easest
heuni
tcont
ri
but
ion

15. Var
iabl
ecost
sar
ecost
sthatv
aryonaper
-uni
tbasi
swi
thchangesi
nthe mar
gin,
thebr
eak-
evenpoi
ntwi
l
ldecr
ease.T

act
ivi
tyl
evel
.T
37. I
fempl
oyeesacceptawagecont
ractt
hatdecr
easest
heuni
tcont
ri
but
ion

16. Di
rectmat
eri
alsanddi
rectl
aborcost
sar
eex
ampl
esofv
ari
abl
ecost
sof mar
gin,
thebr
eak-
evenpoi
ntwi
l
ldecr
ease.F

pr
oduct
ion.T
38. I
fdi
rectmat
eri
alscostperuni
tincr
eases,
thebr
eak-
evenpoi
ntwi
l
ldecr
ease.

17. Tot
alv
ari
abl
ecost
schangeast
hel
evel
ofact
ivi
tychanges.T F

18. Uni
tvar
iabl
ecostdoesnotchangeast
henumberofuni
tsofact
ivi
ty 39. I
fdi
rectmat
eri
alscostperuni
tincr
eases,
thebr
eak-
evenpoi
ntwi
l
lincr
ease.

changes.T T
40. I
fdi
rectmat
eri
alscostperuni
tdecr
eases,
theamountofsal
esnecessar
yto 59. I
nanabsor
pti
oncost
ingi
ncomest
atement
,themanuf
act
uri
ngmar
gini
sthe

ear
nadesi
redamountofpr
ofi
twi
l
ldecr
ease.F excessofsal
esov
ert
hev
ari
abl
ecostofgoodssol
d.F

41. I
ffi
xedcost
sar
e$450,
000andt
heuni
tcont
ri
but
ionmar
gini
s$50,
thesal
es 60. Assumi
ngnoot
herchanges,
oper
ati
ngi
ncomewi
l
lbet
hesameunderbot
h

necessar
ytoear
nanoper
ati
ngi
ncomeof$50,
000ar
e10,
000uni
ts.T t
hev
ari
abl
eandabsor
pti
oncost
ingmet
hodswhent
henumberofuni
ts

manuf
act
uredequal
sthenumberofuni
tssol
d.
42. I
ffi
xedcost
sar
e$650,
000andt
heuni
tcont
ri
but
ionmar
gini
s$30,
thesal
es

necessar
ytoear
nanoper
ati
ngi
ncomeof$30,
000ar
e14,
000uni
ts.F MULTI
PLECHOI
CE

43. Onl
yasi
ngl
eli
ne,
whi
chr
epr
esent
sthedi
ff
erencebet
weent
otal
sal
es 1. Costbehav
iorr
efer
stot
hemanneri
nwhi
ch:

r
evenuesandt
otal
cost
s,i
spl
ott
edont
hepr
ofi
t-
vol
umechar
t.T
a. acostchangesast
her
elat
edact
ivi
tychanges

44. Onl
yasi
ngl
eli
ne,
whi
chr
epr
esent
sthedi
ff
erencebet
weent
otal
sal
es
b. acosti
sal
l
ocat
edt
opr
oduct
s
r
evenuesandt
otal
cost
s,i
spl
ott
edont
hecost
-vol
ume-
prof
itchar
t.F

c. acosti
susedi
nset
ti
ngsel
l
ingpr
ices
45. Cost
-vol
ume-
prof
itanal
ysi
scanbepr
esent
edi
nbot
hequat
ionf
orm and

gr
aphi
cfor
m. T
d. acosti
sest
imat
ed

46. I
fabusi
nesssel
l
stwopr
oduct
s,i
tisnotpossi
blet
oest
imat
ethebr
eak-
even
2. Thet
hreemostcommoncostbehav
iorcl
assi
fi
cat
ionsar
e:
poi
nt.F
a. v
ari
abl
ecost
s,pr
oductcost
s,andsunkcost
s
47. I
fabusi
nesssel
l
sfourpr
oduct
s,i
tisnotpossi
blet
oest
imat
ethebr
eak-
even

poi
nt.F b. f
ixedcost
s,v
ari
abl
ecost
s,andmi
xedcost
s

48. Ev
eni
fabusi
nesssel
l
ssi
xpr
oduct
s,i
tispossi
blet
oest
imat
ethe c. v
ari
abl
ecost
s,per
iodcost
s,anddi
ff
erent
ial
cost
s

br
eak-
evenpoi
nt.T
d. v
ari
abl
ecost
s,sunkcost
s,andoppor
tuni
tycost
s

49. I
ftheuni
tsel
l
ingpr
icei
s$40,
thev
olumeofsal
esi
s$3,
000,
000,
sal
esatt
he
3. Cost
sthatr
emai
nconst
anti
ntot
aldol
l
aramountast
hel
evel
ofact
ivi
ty
br
eak-
evenpoi
ntamountt
o$2,
500,
000,
andt
hemaxi
mum possi
blesal
es
changesar
ecal
l
ed:
ar
e$3,
300,
000,
themar
ginofsaf
etyi
s11,
500uni
ts.F-12,
500

af
ixedcost
s
50. I
ftheuni
tsel
l
ingpr
icei
s$40,
thev
olumeofsal
esi
s$3,
000,
000,
sal
esatt
he
.
br
eak-
evenpoi
ntamountt
o$2,
500,
000,
andt
hemaxi
mum possi
blesal
es

ar
e$3,
300,
000,
themar
ginofsaf
etyi
s14,
500uni
ts.F-12,
500 b mi
xedcost
s

.
51. I
fthev
olumeofsal
esi
s$6,
000,
000andsal
esatt
hebr
eak-
evenpoi
nt

amountt
o$4,
800,
000,
themar
ginofsaf
etyi
s25%.F-20% c oppor
tuni
tycost
s

.
52. I
fthev
olumeofsal
esi
s$7,
000,
000andsal
esatt
hebr
eak-
evenpoi
nt

amountt
o$4,
800,
000,
themar
ginofsaf
etyi
s45.
8%.F-31.
4 dv
ari
abl
ecost
s

53. Compani
eswi
thl
argeamount
soff
ixedcost
swi
l
lgener
all
yhav
eahi
gh

oper
ati
ngl
ever
age.T

54. Al
owoper
ati
ngl
ever
agei
snor
mal
forhi
ghl
yaut
omat
edi
ndust
ri
es.F

55. Gar
moCo.hasanoper
ati
ngl
ever
ageof5.Nex
tyear
'ssal
esar
eex
pect
edt
o

i
ncr
easeby10%.Thecompany
'soper
ati
ngi
ncomewi
l
lincr
easeby50%.T

56. Ther
eli
abi
l
ityofcost
-vol
ume-
prof
itanal
ysi
sdoesNOTdependont
he

assumpt
iont
hatcost
scanbeaccur
atel
ydi
vi
dedi
ntof
ixedandv
ari
abl
e

component
s.F

57. Absor
pti
oncost
ingi
srequi
redf
orf
inanci
alr
epor
ti
ngundergener
all
y

accept
edaccount
ingpr
inci
ples.T

58. Theadopt
ionofv
ari
abl
ecost
ingf
ormanager
ial
deci
sionmaki
ngi
sbasedon

t
hepr
emi
set
hatf
ixedf
act
oryov
erheadcost
sar
erel
atedt
opr
oduct
ive

capaci
tyoft
hemanuf
act
uri
ngpl
antandar
enor
mal
l
ynotaf
fect
edbyt
he

numberofuni
tspr
oduced.T
 d. Numberofschedul
edsur
ger
ies

10. Whi
choft
hef
oll
owi
ngact
ivi
tybaseswoul
dbet
hemostappr
opr
iat
efor

gasol
i
necost
sofadel
i
ver
yser
vice,
suchasUni
tedPost
alSer
vice?
4. Whi
choft
hegr
aphsi
nFi
gur
e20-
1il
l
ust
rat
est
hebehav
iorofat
otal
fixed

cost
? a. Numberoft
rucksempl
oyed

a. Gr
aph2 b. Numberofmi
lesdr
iven

b. Gr
aph3 c. Numberoft
rucksi
nser
vice

c. Gr
aph4 d. Numberofpackagesdel
i
ver
ed

d. Gr
aph1 11. Mostoper
ati
ngdeci
sionsofmanagementf
ocusonanar
rowr
angeof

act
ivi
tycal
l
edt
he:
5. Whi
choft
hegr
aphsi
nFi
gur
e20-
1il
l
ust
rat
est
hebehav
iorofat
otal
var
iabl
e

cost
? a. r
elev
antr
angeofpr
oduct
ion

a. Gr
aph2 b. st
rat
egi
clev
elofpr
oduct
ion

b. Gr
aph3 c. opt
imal
lev
elofpr
oduct
ion

c. Gr
aph4 d. t
act
ical
oper
ati
ngl
evel
ofpr
oduct
ion

d. Gr
aph1 12. Cost
sthatv
aryi
ntot
ali
ndi
rectpr
opor
ti
ont
ochangesi
nanact
ivi
tyl
evel
are

cal
l
ed:
6. Whi
choft
hegr
aphsi
nFi
gur
e20-
1il
l
ust
rat
est
henat
ureofami
xedcost
?

a. f
ixedcost
s
a. Gr
aph2

b. sunkcost
s
b. Gr
aph3

c. v
ari
abl
ecost
s
c. Gr
aph4

d. di
ff
erent
ial
cost
s
d. Gr
aph1

7. Whi
choft
hef
oll
owi
ngcost
sisanexampl
eofacostt
hatr
emai
nst
hesame

i
ntot
alast
henumberofuni
tspr
oducedchanges?

13. Whi
choft
hef
oll
owi
ngi
sanexampl
eofacostt
hatv
ari
esi
ntot
alast
he
a. Di
rectl
abor
numberofuni
tspr
oducedchanges?

b. Sal
aryofaf
act
orysuper
visor
a. Sal
aryofapr
oduct
ionsuper
visor

c. Uni
tsofpr
oduct
iondepr
eci
ati
ononf
act
oryequi
pment
b. Di
rectmat
eri
alscost

d. Di
rectmat
eri
als
c. Pr
oper
tyt
axesonf
act
orybui
l
dings

8. Whi
choft
hef
oll
owi
ngdescr
ibest
hebehav
ioroft
hef
ixedcostperuni
t?
d. St
rai
ght
-l
inedepr
eci
ati
ononf
act
oryequi
pment

a.Decr
easeswi
thi
ncr
easi
ngpr
oduct
ion
14. Whi
choft
hef
oll
owi
ngi
sNOTanexampl
eofacostt
hatv
ari
esi
ntot
alast
he

numberofuni
tspr
oducedchanges?
b.Decr
easeswi
thdecr
easi
ngpr
oduct
ion

a. El
ect
ri
cit
yperKWHt
ooper
atef
act
oryequi
pment
c.Remai
nsconst
antwi
thchangesi
npr
oduct
ion

b. Di
rectmat
eri
alscost
d.I
ncr
easeswi
thi
ncr
easi
ngpr
oduct
ion

c. St
rai
ght
-l
inedepr
eci
ati
ononf
act
oryequi
pment
9. Whi
choft
hef
oll
owi
ngact
ivi
tybaseswoul
dbet
hemostappr
opr
iat
eforf
ood

cost
sofahospi
tal
?
d. Wagesofassembl
ywor
ker

a. Numberofcooksschedul
edt
owor
k
15. Whi
choft
hef
oll
owi
ngi
sNOTanexampl
eofacostt
hatv
ari
esi
ntot
alast
he

numberofuni
tspr
oducedchanges?
b. Numberofx-
ray
staken

a. El
ect
ri
cit
yperKWHt
ooper
atef
act
oryequi
pment
c. Numberofpat
ient
swhost
ayi
nthehospi
tal
 b. Di
rectmat
eri
alscost b. $28,
400

c. I
nsur
ancepr
emi
umsonf
act
orybui
ldi
ng c. $17,
600

d. Wagesofassembl
ywor
ker d. cannotbedet
ermi
nedf
rom t
hedat
agi
ven

16. Whi
choft
hef
oll
owi
ngdescr
ibest
hebehav
ioroft
hev
ari
abl
ecostperuni
t?

a. Var
iesi
nincr
easi
ngpr
opor
ti
onwi
thchangesi
ntheact
ivi
tyl
evel 22. Gi
vent
hef
oll
owi
ngcostandact
ivi
tyobser
vat
ionsf
orBount
yCompany
s

ut
il
it
ies,
uset
hehi
gh-
lowmet
hodt
ocal
cul
ateBount
yvar
iabl
eut
il
it
iescost
s
b. Var
iesi
ndecr
easi
ngpr
opor
ti
onwi
thchangesi
ntheact
ivi
tyl
evel
permachi
nehour
.

c. Remai
nsconst
antwi
thchangesi
ntheact
ivi
tyl
evel
Cost Machi
neHour
s

d. Var
iesi
ndi
rectpr
opor
ti
onwi
tht
heact
ivi
tyl
evel
Mar
ch $3,
100 15,
000

17. Thegr
aphofav
ari
abl
ecostwhenpl
ott
edagai
nsti
tsr
elat
edact
ivi
tybase
Apr
il 2,
700 10,
000
appear
sasa:

May 2,
900 12,
000
a. ci
rcl
e

June 3,
600 18,
000
b. r
ect
angl
e

c. st
rai
ghtl
ine

a. $10.
00
d. cur
vedl
i
ne

b. $.
67
18. Acostt
hathaschar
act
eri
sti
csofbot
hav
ari
abl
ecostandaf
ixedcosti
s

cal
l
eda:
c. $.
63

a. v
ari
abl
e/f
ixedcost
d. $.
11

b. mi
xedcost
23. Gi
vent
hef
oll
owi
ngcostandact
ivi
tyobser
vat
ionsf
orSmi
thsonCompany
s

ut
il
it
ies,
uset
hehi
gh-
lowmet
hodt
ocal
cul
ateSmi
thsonsf
ixedcost
sper
c. di
scr
eti
onar
ycost
mont
h. Roundv
ari
abl
ecostperuni
ttot
wodeci
mal
placesi
nyour

d. sunkcost cal
cul
ati
ons.

19. Whi
choft
hef
oll
owi
ngcost
sisami
xedcost
?

a. Sal
aryofaf
act
orysuper
visor Cost Machi
neHour
s

b. El
ect
ri
cit
ycost
sof$2perki
l
owat
t-
hour Januar
y $52,
200 20,
000

c. Rent
alcost
sof$5,
000permont
hpl
us$.
30permachi
nehourofuse Febr
uar
y 75,
000 29,
000

d. St
rai
ght
-l
inedepr
eci
ati
ononf
act
oryequi
pment
Mar
ch 57,
000 22,
000

20. Forpur
posesofanal
ysi
s,mi
xedcost
sar
egener
all
y:
Apr
il 64,
000 24,
500

a. cl
assi
fi
edasf
ixedcost
s

b. cl
assi
fi
edasv
ari
abl
ecost
s
a. $1,
600

c. cl
assi
fi
edasper
iodcost
s
b. $2,
530

d. separ
atedi
ntot
hei
rvar
iabl
eandf
ixedcostcomponent
s
c. $22,
800

21. Mar
cyeCo.manuf
act
uresof
fi
cef
urni
tur
e.Dur
ingt
hemostpr
oduct
ivemont
h
d. $50,
600
oft
hey
ear
,3,
500deskswer
emanuf
act
uredatat
otal
costof$84,
400.I
nit
s

sl
owestmont
h,t
hecompanymade1,
100desksatacostof$46,
000.Usi
ng 24. Gi
vent
hef
oll
owi
ngcostandact
ivi
tyobser
vat
ionsf
orTacoCompany
s

t
hehi
gh-
lowmet
hodofcostest
imat
ion,
tot
alf
ixedcost
sar
e: ut
il
it
ies,
uset
hehi
gh-
lowmet
hodt
ocal
cul
ateTacosv
ari
abl
eut
il
it
iescost
s

permachi
nehour
.
a. $56,
000
 Cost Machi
neHour
s c. est
imat
ingcost
s.

May $8,
300 15,
000 d. changi
nganexi
sti
ngpr
oductpr
oduct
ion.

June 10,
400 20,
000 29. Themanuf
act
uri
ngcostofPr
ancerI
ndust
ri
esf
ort
hreemont
hsoft
hey
ear

ar
epr
ovi
dedbel
ow:
Jul
y 7,
200 12,
000

August 9,
500 18,
000
Tot
alCost Pr
oduct
ion

Apr
il $60,
700 1,
200Uni
ts
a. $10.
00
May 80,
920 1,
800
b. $.
60

June 100,
300 2,
400
c. $.
40

d. $.
52

Usi
ngt
hehi
gh-
lowmet
hod,
thev
ari
abl
ecostperuni
t,andt
het
otal
fixed

cost
sar
e:

25. Manl
eyCo.manuf
act
uresof
fi
cef
urni
tur
e.Dur
ingt
hemostpr
oduct
ivemont
h
a. $32.
30peruni
tand$77,
520r
espect
ivel
y.
oft
hey
ear
,4,
500deskswer
emanuf
act
uredatat
otal
costof$86,
625.I
nit
s

sl
owestmont
h,t
hecompanymade1,
800desksatacostof$49,
500.Usi
ng b. $33peruni
tand$21,
100r
espect
ivel
y.

t
hehi
gh-
lowmet
hodofcostest
imat
ion,
tot
alf
ixedcost
sar
e:
c. $32peruni
tand$76,
800r
espect
ivel
y.

a. $61,
875
d. $32.
30peruni
tand$22,
780r
espect
ivel
y.

b. $33,
875
30. Aspr
oduct
ioni
ncr
eases,
whatshoul
dhappent
othev
ari
abl
ecost
speruni
t?

c. $24,
750
a. St
ayt
hesame.

d. cannotbedet
ermi
nedf
rom t
hedat
agi
ven
b. I
ncr
ease.

26. Whi
choft
hef
oll
owi
ngst
atement
sist
ruer
egar
dingf
ixedand
c. Decr
ease.
v
ari
abl
ecost
s?

d. Ei
theri
ncr
easeordecr
ease,
dependi
ngont
hef
ixedcost
s.
a. Bot
hcost
sar
econst
antwhenconsi
der
edonaperuni
tbasi
s.

31. Cool
-I
tCompanymanuf
act
uresandsel
l
scommer
cial
aircondi
ti
oner
s.
b. Bot
hcost
sar
econst
antwhenconsi
der
edonat
otal
basi
s.
Becauseofcur
rentt
rends,
itexpect
stoi
ncr
easesal
esby15per
centnext

c. Fi
xedcost
sar
econst
anti
ntot
al,
andv
ari
abl
ecost
sar
econst
antper y
ear
.Ift
hisex
pect
edl
evel
ofpr
oduct
ionandsal
esoccur
sandpl
ant

uni
t. expansi
oni
snotneeded,
howshoul
dthi
sincr
easeaf
fectnexty
ear
stot
al

amount
sfort
hef
oll
owi
ngcost
s.
d. Var
iabl
ecost
sar
econst
anti
ntot
al,
andf
ixedcost
svar
yint
otal
.

Var
iabl
eCost
s,Mi
xedCost
s,Fi
xedCost
s
27. Aspr
oduct
ioni
ncr
eases,
whatwoul
dyouexpectt
ohappent
ofi
xedcostper

uni
t? a. i
ncr
ease i
ncr
ease

i
ncr
ease
a. I
ncr
ease

b. i
ncr
ease nochange
b. Decr
ease
i
ncr
ease

c. Remai
nthesame
c. nochange nochange

i
ncr
ease
d. Ei
theri
ncr
easeordecr
ease,
dependi
ngont
hev
ari
abl
ecost
s

d. decr
ease i
ncr
ease
28. Knowi
nghowcost
sbehav
eisusef
ult
omanagementf
oral
lthef
oll
owi
ng
i
ncr
ease
r
easonsexceptf
or

32. Gi
vent
hef
oll
owi
ngcost
sandact
ivi
ti
esf
orDowni
ngCompanyel
ect
ri
cal
a. pr
edi
cti
ngcust
omerdemand.
cost
s,uset
hehi
gh-
lowmet
hodt
ocal
cul
ateDowni
ngsv
ari
abl
eel
ect
ri
cal

b. pr
edi
cti
ngpr
ofi
tsassal
esandpr
oduct
ionv
olumeschange. cost
spermachi
nehour
.
 Cost
s Machi
neHour
s c. 62%

Apr
il $11,
700 15,
000 d. 32%

May $13,
200 17,
500 38. Whatr
ati
oindi
cat
est
heper
cent
ageofeachsal
esdol
l
art
hati
sav
ail
abl
eto

cov
erf
ixedcost
sandt
opr
ovi
deapr
ofi
t?
June $11,
400 14,
500

a. Mar
ginofsaf
etyr
ati
o
a. $2.
08

b. Cont
ri
but
ionmar
ginr
ati
o
b. $6.
00

c. Cost
sandexpensesr
ati
o
c. $0.
60

d. Pr
ofi
trat
io
d. $1.
20

39. Af
ir
m oper
atedat80%ofcapaci
tyf
ort
hepasty
ear
,dur
ingwhi
chf
ixed
33. Thesy
stemat
icexami
nat
ionoft
her
elat
ionshi
psamongsel
l
ingpr
ices,
cost
swer
e$210,
000,
var
iabl
ecost
swer
e70%ofsal
es,
andsal
eswer
e
v
olumeofsal
esandpr
oduct
ion,
cost
s,andpr
ofi
tsi
ster
med:
$1,
000,
000.Oper
ati
ngpr
ofi
twas:

a. cont
ri
but
ionmar
ginanal
ysi
s
a. $90,
000

b. cost
-vol
ume-
prof
itanal
ysi
s
b. $210,
000

c. budget
aryanal
ysi
s
c. $590,
000

d. gr
osspr
ofi
tanal
ysi
s
d. $490,
000

34. I
ncost
-vol
ume-
prof
itanal
ysi
s,al
lcost
sar
ecl
assi
fi
edi
ntot
hef
oll
owi
ngt
wo
40. I
fsal
esar
e$425,
000,
var
iabl
ecost
sar
e68%ofsal
es,
andoper
ati
ngi
ncome
cat
egor
ies:
i
s$50,
000,
whati
sthecont
ri
but
ionmar
ginr
ati
o?

a. mi
xedcost
sandv
ari
abl
ecost
s
a. 32%

b. sunkcost
sandf
ixedcost
s
b. 26.
8%

c. di
scr
eti
onar
ycost
sandsunkcost
s
c. 11.
8%

d. v
ari
abl
ecost
sandf
ixedcost
s
d. 63%

35. Cont
ri
but
ionmar
gini
s:
41. Var
iabl
ecost
sasaper
cent
ageofsal
esf
orLemonI
nc.ar
e80%,
cur
rent

sal
esar
e$600,
000,
andf
ixedcost
sar
e$130,
000.Howmuchwi
l
loper
ati
ng
a. t
heexcessofsal
esr
evenueov
erv
ari
abl
ecost
i
ncomechangei
fsal
esi
ncr
easeby$40,
000?
b. anot
hert
ermf
orv
olumei
nthe"
cost
-vol
ume-
prof
it
"anal
ysi
s
a. $8,
000i
ncr
ease
c. pr
ofi
t
b. $8,
000decr
ease
d. t
hesameassal
esr
evenue
c. $30,
000decr
ease
36. Thecont
ri
but
ionmar
ginr
ati
ois:
d. $30,
000i
ncr
ease
a. t
hesameast
hev
ari
abl
ecostr
ati
o
42. Spi
ceI
nc.
'
suni
tsel
l
ingpr
icei
s$60,
theuni
tvar
iabl
ecost
sar
e$35,
fixed
b. t
hesameaspr
ofi
t cost
sar
e$125,
000,
andcur
rentsal
esar
e10,
000uni
ts.Howmuchwi
l
l

oper
ati
ngi
ncomechangei
fsal
esi
ncr
easeby8,
000uni
ts?
c. t
hepor
ti
onofequi
tycont
ri
but
edbyt
hest
ockhol
der
s

a. $150,
000decr
ease
d. t
hesameast
hepr
ofi
t-
vol
umer
ati
o

b. $175,
000i
ncr
ease
37. I
fsal
esar
e$820,
000,
var
iabl
ecost
sar
e58%ofsal
es,
andoper
ati
ngi
ncome

i
s$260,
000,
whati
sthecont
ri
but
ionmar
ginr
ati
o? c. $200,
000i
ncr
ease

a. 53.
1% d. $150,
000i
ncr
ease

b. 42% 43. I
fsal
esar
e$914,
000,
var
iabl
ecost
sar
e$514,
800,
andoper
ati
ngi
ncomei
s

$260,
000,
whati
sthecont
ri
but
ionmar
ginr
ati
o?
 a. 53.
1% d. $133,
750

b. 33% 49.I
ffi
xedcost
sar
e$250,
000,
theuni
tsel
l
ingpr
icei
s$125,
andt
heuni
t

v
ari
abl
ecost
sar
e$73,
whati
sthebr
eak-
evensal
es(
uni
ts)
?
c. 64%

a. 3,
425uni
ts
d. 43.
7%

b. 2,
381uni
ts
44. Af
ir
m oper
atedat80%ofcapaci
tyf
ort
hepasty
ear
,dur
ingwhi
chf
ixed

cost
swer
e$330,
000,
var
iabl
ecost
swer
e70%ofsal
es,
andsal
eswer
e c. 2,
000uni
ts

$1,
000,
000.Oper
ati
ngpr
ofi
twas:
d. 4,
808uni
ts

a. $140,
000
50. I
ffi
xedcost
sar
e$750,
000andv
ari
abl
ecost
sar
e80%ofsal
es,
whati
sthe

b. (
$30,
000) br
eak-
evenpoi
nti
nsal
esdol
l
ars?

c. $370,
000 a. $937,
500

d. $670,
000 b. $600,
000

45. I
fsal
esar
e$525,
000,
var
iabl
ecost
sar
e56%ofsal
es,
andoper
ati
ngi
ncome c. $3,
750,
000

i
s$50,
000,
whati
sthecont
ri
but
ionmar
ginr
ati
o?
d. $1,
275,
000

a. 44%
51. I
ffi
xedcost
sar
e$1,
400,
000,
theuni
tsel
l
ingpr
icei
s$240,
andt
heuni
t

b. 26.
5% v
ari
abl
ecost
sar
e$110,
whati
stheamountofsal
esr
equi
redt
oreal
i
zean

oper
ati
ngi
ncomeof$200,
000?
c. 9.
5%

a. 10,
769uni
ts
d. 64%

b. 12,
000uni
ts
46. Zi
peeI
nc.
'
suni
tsel
l
ingpr
icei
s$90,
theuni
tvar
iabl
ecost
sar
e$40.
50,
fix
ed

cost
sar
e$170,
000,
andcur
rentsal
esar
e12,
000uni
ts.Howmuchwi
l
l c. 12,
308uni
ts

oper
ati
ngi
ncomechangei
fsal
esi
ncr
easeby5,
000uni
ts?
d. 1,
538uni
ts

a. $125,
000decr
ease
52. I
ffi
xedcost
sar
e$300,
000,
theuni
tsel
l
ingpr
icei
s$31,
andt
heuni
tvar
iabl
e

b. $175,
000i
ncr
ease cost
sar
e$22,
whati
sthebr
eak-
evensal
es(
uni
ts)i
ffi
xedcost
sar
ereduced

by$30,
000?
c. $75,
000i
ncr
ease

a. 30,
000uni
ts
d. $247,
500i
ncr
ease

b. 8,
710uni
ts
47.ZekeCompanysel
l
s25,
000uni
tsat$21peruni
t.Var
iabl
ecost
sar
e$10per

uni
t,andf
ixedcost
sar
e$75,
000.Thecont
ri
but
ionmar
ginr
ati
oandt
heuni
t c. 12,
273uni
ts

cont
ri
but
ionmar
ginar
e:
d. 20,
000uni
ts

a. 47%and$11peruni
t
53. I
ffi
xedcost
sar
e$500,
000,
theuni
tsel
l
ingpr
icei
s$55,
andt
heuni
tvar
iabl
e

b. 53%and$7peruni
t cost
sar
e$30,
whati
sthebr
eak-
evensal
es(
uni
ts)i
ffi
xedcost
sar
e

i
ncr
easedby$80,
000?
c. 47%and$8peruni
t

a. 10,
545uni
ts
d. 52%and$11peruni
t

b. 19,
333uni
ts
48.
Ift
hecont
ri
but
ionmar
ginr
ati
oforFr
anceCompanyi
s45%,
sal
eswer
e

$425,
000.andf
ixedcost
swer
e$100,
000,
whatwast
hei
ncomef
rom c. 23,
200uni
ts

oper
ati
ons?
d. 25,
000uni
ts

a. $233,
750
54. I
ffi
xedcost
sar
e$350,
000,
theuni
tsel
l
ingpr
icei
s$29,
andt
heuni
tvar
iabl
e

b. $91,
250 cost
sar
e$20,
whati
sthebr
eak-
evensal
es(
uni
ts)i
fthev
ari
abl
ecost
sar
e

decr
easedby$4?
c. $191,
250
 a. 26,
924uni
ts 60.I
ffi
xedcost
sar
e$561,
000andt
heuni
tcont
ri
but
ionmar
gini
s$8.
00,
whati
s

t
hebr
eak-
evenpoi
nti
nuni
tsi
fvar
iabl
ecost
sar
edecr
easedby$.
50auni
t?
b. 12,
069uni
ts

a. 66,
000
c. 21,
875uni
ts

b. 70,
125
d. 38,
889uni
ts

c. 74,
800
55. I
ffi
xedcost
sar
e$450,
000,
theuni
tsel
l
ingpr
icei
s$75,
andt
heuni
tvar
iabl
e

cost
sar
e$50,
whatar
etheol
dandnewbr
eak-
evensal
es(
uni
ts)i
ftheuni
t d. 60,
000

sel
l
ingpr
icei
ncr
easesby$10?
61.I
fvar
iabl
ecost
speruni
tincr
easedbecauseofani
ncr
easei
nhour
lywage

a. 6,
000uni
tsand5,
294uni
ts r
ates,
thebr
eak-
evenpoi
ntwoul
d:

b. 18,
000uni
tsand6,
000uni
ts a. decr
ease

c. 18,
000uni
tsand12,
858uni
ts b. i
ncr
ease

d. 9,
000uni
tsand15,
000uni
ts c. r
emai
nthesame

56. I
ffi
xedcost
sar
e$200,
000andt
heuni
tcont
ri
but
ionmar
gini
s$20,
what d. i
ncr
easeordecr
ease,
dependi
ngupont
heper
cent
agei
ncr
easei
nwage

amountofuni
tsmustbesol
dinor
dert
ohav
eaz
eropr
ofi
t? r
ates

a. 25,
000 62.I
fvar
iabl
ecost
speruni
tdecr
easedbecauseofadecr
easei
nut
il
it
yrat
es,
the

br
eak-
evenpoi
ntwoul
d:
b. 20,
000

a. decr
ease
c. 200,
000

b. i
ncr
ease
d. 10,
000

c. r
emai
nthesame
57. I
ffi
xedcost
sar
e$700,
000andt
heuni
tcont
ri
but
ionmar
gini
s$14,
what

amountofuni
tsmustbesol
dinor
dert
oreal
i
zeanoper
ati
ngi
ncomeof d. i
ncr
easeordecr
ease,
dependi
ngupont
heper
cent
agei
ncr
easei
nut
il
it
y

$100,
000? r
ates

a. 5,
000 63.I
ffi
xedcost
sincr
easedandv
ari
abl
ecost
speruni
tdecr
eased,
the

br
eak-
evenpoi
ntwoul
d:
b. 41,
667

a. i
ncr
ease
c. 57,
143

b. decr
ease
d. 58,
333

c. r
emai
nthesame
58. I
ffi
xedcost
sar
e$500,
000andt
heuni
tcont
ri
but
ionmar
gini
s$20,
whati
s

t
hebr
eak-
evenpoi
nti
nuni
tsi
ffi
xedcost
sar
ereducedby$80,
000? d. cannotbedet
ermi
nedf
rom t
hedat
apr
ovi
ded

a. 25,
000 64.Whi
choft
hef
oll
owi
ngcondi
ti
onswoul
dcauset
hebr
eak-
evenpoi
ntt
o

decr
ease?
b. 29,
000

a. Tot
alf
ixedcost
sincr
ease
c. 4,
000

b. Uni
tsel
l
ingpr
icedecr
eases
d. 21,
000

c. Uni
tvar
iabl
ecostdecr
eases
59.I
ffi
xedcost
sar
e$600,
000andt
heuni
tcont
ri
but
ionmar
gini
s$40,
whati
s

t
hebr
eak-
evenpoi
nti
ffi
xedcost
sar
eincr
easedby$90,
000? d. Uni
tvar
iabl
ecosti
ncr
eases

a. 17,
250 65.Whi
choft
hef
oll
owi
ngcondi
ti
onswoul
dcauset
hebr
eak-
evenpoi
ntt
o

i
ncr
ease?
b. 15,
000

a. Tot
alf
ixedcost
sdecr
ease
c. 8,
333

b. Uni
tsel
l
ingpr
icei
ncr
eases
d. 9,
667
 c. Uni
tvar
iabl
ecostdecr
eases d. $1,
250,
000

d. Uni
tvar
iabl
ecosti
ncr
eases 70. I
ffi
xedcost
sar
e$240,
000,
theuni
tsel
l
ingpr
icei
s$36,
andt
heuni
tvar
iabl
e

cost
sar
e$20,
whati
sthebr
eak-
evensal
es(
uni
ts)
?
66.Whi
choft
hef
oll
owi
ngcondi
ti
onswoul
dcauset
hebr
eak-
evenpoi
ntt
o

i
ncr
ease? a. 12,
000uni
ts

a. Tot
alf
ixedcost
sincr
ease b. 27,
000uni
ts

b. Uni
tsel
l
ingpr
icei
ncr
eases c. 15,
000uni
ts

c. Uni
tvar
iabl
ecostdecr
eases d. 6,
667uni
ts

d. Tot
alf
ixedcost
sdecr
ease 71. I
ffi
xedcost
sar
e$1,
500,
000,
theuni
tsel
l
ingpr
icei
s$250,
andt
heuni
t

v
ari
abl
ecost
sar
e$130,
whati
stheamountofsal
esr
equi
redt
oreal
i
zean

oper
ati
ngi
ncomeof$200,
000?

a. 14,
166uni
ts

67.Cal
zoneCo.hasbudget
edsal
aryi
ncr
easest
ofact
orysuper
visor
stot
ali
ng
b. 12,
500uni
ts
10%.I
fsel
l
ingpr
icesandal
lot
hercostr
elat
ionshi
psar
ehel
dconst
ant
,next

y
ear
'sbr
eak-
evenpoi
ntwi
l
l: c. 16,
000uni
ts

a. decr
easeby10% d. 11,
538uni
ts

b. i
ncr
easeby10% 72. I
ffi
xedcost
sar
e$490,
000,
theuni
tsel
l
ingpr
icei
s$35,
andt
heuni
tvar
iabl
e

cost
sar
e$20,
whati
sthebr
eak-
evensal
es(
uni
ts)i
ffi
xedcost
sar
ereduced
c. cannotbedet
ermi
nedf
rom t
hedat
agi
ven
by$40,
000?

d. i
ncr
easeatar
ategr
eat
ert
han10%
a. 32,
667uni
ts

68. Fl
yi
ngCl
oudCo.hast
hef
oll
owi
ngoper
ati
ngdat
afori
tsmanuf
act
uri
ng
b. 14,
000uni
ts
oper
ati
ons:

c. 30,
000uni
ts
Uni
tsel
l
ingpr
ice $ 250

d. 24,
500uni
ts
Uni
tvar
iabl
ecost 100

73. I
ffi
xedcost
sar
e$400,
000,
theuni
tsel
l
ingpr
icei
s$25,
andt
heuni
tvar
iabl
e
Tot
alf
ixedcost
s $840,
000
cost
sar
e$15,
whati
sthebr
eak-
evensal
es(
uni
ts)i
fthev
ari
abl
ecost
sar
e

i
ncr
easedby$2?

a. 50,
000uni
ts
Thecompanyhasdeci
dedt
oincr
easet
hewagesofhour
lywor
ker
swhi
ch

wi
l
lincr
easet
heuni
tvar
iabl
ecostby10%.I
ncr
easesi
nthesal
ari
esof
b. 30,
770uni
ts
f
act
orysuper
visor
sandpr
oper
tyt
axesf
ort
hef
act
orywi
l
lincr
easef
ixed

cost
sby4%.I
fsal
espr
icesar
ehel
dconst
ant
,thenextbr
eak-
evenpoi
ntf
or c. 40,
000uni
ts

Fl
yi
ngCl
oudCo.wi
l
lbe:
d. 26,
667uni
ts

a. i
ncr
easedby640uni
ts
74. I
ffi
xedcost
sar
e$240,
000,
theuni
tsel
l
ingpr
icei
s$32,
andt
heuni
tvar
iabl
e

b. i
ncr
easedby400uni
ts cost
sar
e$20,
whatar
etheol
dandnewbr
eak-
evensal
es(
uni
ts)i
ftheuni
t

sel
l
ingpr
icei
ncr
easesby$4?
c. decr
easedby640uni
ts

a. 7,
500uni
tsand6,
667uni
ts
d. i
ncr
easedby800uni
ts

b. 20,
000uni
tsand30,
000uni
ts
69. I
ffi
xedcost
sar
e$750,
000andv
ari
abl
ecost
sar
e60%ofsal
es,
whati
sthe

br
eak-
evenpoi
nt(
dol
l
ars)
? c. 20,
000uni
tsand15,
000uni
ts

a. $1,
875,
000 d. 12,
000uni
tsand15,
000uni
ts

b. $300,
000 75. Whent
hef
ixedcost
sar
e$120,
000andt
hecont
ri
but
ionmar
gini
s$20,
the

br
eak-
evenpoi
nti
s
c. $2,
500,
000
 a. 16,
000uni
ts d. dat
agat
her
ing

b. 8,
000uni
ts 81.I
nacost
-vol
ume-
prof
itchar
t,t
he

c. 7,
998uni
ts a. t
otal
costl
i
nebegi
nsatzer
o.

d. 6,
000uni
ts b. sl
opeoft
het
otal
costl
i
nei
sdependentont
hef
ixedcostperuni
t.

76. I
ffi
xedcost
sar
e$39,
600,
theuni
tsel
l
ingpr
icei
s$42,
andt
hev
ari
abl
ecost
s c. t
otalcostl
inebegi
nsatt
het
otal
fixedcostv
alueont
hev
ert
icalaxi
s.

ar
e$24,
whati
sthebr
eak-
evensal
es(
uni
ts)
?
d. t
otal
costl
i
nenor
mal
l
ybegi
nsatzer
o.

a. 2,
500
82.Ther
elat
ivedi
str
ibut
ionofsal
esamongt
hev
ari
ouspr
oduct
ssol
dbya

b. 943 busi
nessi
ster
medt
he:

c. 1,
650 a. busi
ness'
sbasketofgoods

d. 2,
200 b. cont
ri
but
ionmar
ginmi
x

c. sal
esmi
x

77. I
ffi
xedcost
sar
e$39,
600,
theuni
tsel
l
ingpr
icei
s$42,
andt
hev
ari
abl
ecost
s d. pr
oductpor
tfol
i
o

ar
e$24,
whati
sthebr
eak-
evensal
es(
uni
t)i
fthev
ari
abl
ecost
sar
e
83.Whenabusi
nesssel
l
smor
ethanonepr
oductatv
ary
ingsel
l
ingpr
ices,
the
decr
easedby$2?
busi
ness'
sbr
eak-
evenpoi
ntcanbedet
ermi
nedasl
ongast
henumberof

a. 1,
650 pr
oduct
sdoesnotexceed:

b. 990 a. t
wo

c. 1,
980 b. t
hree

d. 1,
350 c. f
if
teen

78. Thepoi
ntwher
ethesal
esl
i
neandt
het
otal
cost
sli
nei
nter
sectont
he d. t
her
eisnol
imi
t

cost
-vol
ume-
prof
itchar
trepr
esent
s:

a. t
hemaxi
mum possi
bleoper
ati
ngl
oss
Car
terCo.sel
l
stwopr
oduct
s,Ar
ksandBi
ns.Lasty
earCar
tersol
d14,
000

b. t
hemaxi
mum possi
bleoper
ati
ngi
ncome uni
tsofAr
ksand56,
000uni
tsofBi
ns.Rel
ateddat
aar
e:

c. t
het
otal
fixedcost
s

d. t
hebr
eak-
evenpoi
nt Uni
tSel
l
ing Uni
tVar
iabl
e Uni
tCont
ri
but
ion

79. Thepoi
ntwher
ethepr
ofi
tli
nei
nter
sect
sthehor
izont
alaxi
sont
he Pr
oduct Pr
ice Cost Mar
gin

pr
ofi
t-
vol
umechar
trepr
esent
s:
Ar
ks $120 $80 $40

a. t
hemaxi
mum possi
bleoper
ati
ngl
oss
Bi
ns  
  
 80  
 60  
 20

b. t
hemaxi
mum possi
bleoper
ati
ngi
ncome

c. t
het
otal
fixedcost
s
84.WhatwasCar
terCo.
'
ssal
esmi
xlasty
ear
?

d. t
hebr
eak-
evenpoi
nt
a. 20%Ar
ks,
80%Bi
ns

80.Wi
tht
heai
dofcomput
ersof
twar
e,manager
scanv
aryassumpt
ions
b. 12%Ar
ks,
28%Bi
ns
r
egar
dingsel
l
ingpr
ices,
cost
s,andv
olumeandcani
mmedi
atel
yseet
he

ef
fect
sofeachchangeont
hebr
eak-
evenpoi
ntandpr
ofi
t.Thi
siscal
l
ed:
c. 70%Ar
ks,
30%Bi
ns

a. "
Whati
f"orsensi
ti
vi
tyanal
ysi
s
d. 40%Ar
ks,
20%Bi
ns

b. v
aryt
hedat
aanal
ysi
s
85. WhatwasCar
terCo.
'
swei
ght
edav
erageuni
tsel
l
ingpr
ice?

c. comput
erai
dedanal
ysi
s
a. $200
 b. $100 c. 2.
0

c. $80 d. 1.
333

d. $88 92. Thedi

ff
erencebet
weent
hecur
rentsal
esr
evenueandt
hesal
esatt
he

br
eak-
evenpoi
nti
scal
l
edt
he:
86. WhatwasCar
terCo.
'
swei
ght
edav
eragev
ari
abl
ecost
?

a. cont
ri
but
ionmar
gin
a. $140

b. mar
ginofsaf
ety
b. $70

c. pr
icef
act
or
c. $64

d. oper
ati
ngl
ever
age
d. $60

93. Cost
-vol
ume-
prof
itanal
ysi
scannotbeusedi
fwhi
choft
hef
oll
owi
ngoccur
s?
87. WhatwasCar
terCo.
'
swei
ght
edav
erageuni
tcont
ri
but
ionmar
gin?

a. Cost
scannotbepr
oper
lycl
assi
fi
edi
ntof
ixedandv
ari
abl
ecost
s
a. $24

b. Thet
otal
fixedcost
schange
b. $60

c. Theperuni
tvar
iabl
ecost
schange
c. $92

d. Peruni
tsal
espr
iceschange
d. $20

94. Assumet
hatCor
nCo.sol
d8,
000uni
tsofPr
oductAand2,
000uni
tsof
88. Assumi
ngt
hatl
asty
ear
'sf
ixedcost
stot
aled$960,
000,
whatwasCar
ter
Pr
oductBdur
ingt
hepasty
ear
.Theuni
tcont
ri
but
ionmar
ginsf
orPr
oduct
sA
Co.
'
sbr
eak-
evenpoi
nti
nuni
ts?
andBar
e$30and$60r
espect
ivel
y.Cor
nhasf
ixedcost
sof$378,
000.The

br
eak-
evenpoi
nti
nuni
tsi
s:
a. 40,
000uni
ts

a. 8,
000uni
ts
b. 12,
000uni
ts

b. 6,
300uni
ts
c. 35,
000uni
ts

c. 12,
600uni
ts
d. 28,
000uni
ts

d. 10,
500uni
ts
89. I
fabusi
nesshadsal
esof$4,
000,
000andamar
ginofsaf
etyof20%,
the

br
eak-
evenpoi
ntwas:
95.I
fsal
esar
e$500,
000,
var
iabl
ecost
sar
e75%ofsal
es,
andoper
ati
ngi
ncome

i
s$50,
000,
whati
stheoper
ati
ngl
ever
age?
a. $5,
000,
000

a. 0
b. $3,
200,
000

b. 1.
25
c. $12,
000,
000

c. 2.
2
d. $1,
000,
000

d. 2.
5
90. For
deCo.hasanoper
ati
ngl
ever
ageof4.Sal
esar
eex
pect
edt
oincr
easeby

8%nexty
ear
.Oper
ati
ngi
ncomei
s:
96.TheRockyCompanyr
epor
tst
hef
oll
owi
ngdat
a.

a. unaf
fect
ed
Sal
es $700,
000

b. expect
edt
oincr
easeby2%
Var
iabl
ecost
s $300,
000

c. expect
edt
oincr
easeby32%
Fi
xedcost
s $120,
000

d. expect
edt
oincr
easeby4%
RockyCompany
soper
ati
ngl
ever
agei
s:

91. I
fsal
esar
e$400,
000,
var
iabl
ecost
sar
e80%ofsal
es,
andoper
ati
ngi
ncome
a. 3.
33
i
s$40,
000,
whati
stheoper
ati
ngl
ever
age?

b. 2.
5
a. 0

c. 1.
0
b. 7.
500
 d. 1.
4 c. 30,
000uni
ts

d. 11,
250uni
ts

Rust
yCo.sel
l
stwopr
oduct
s,XandY.Lasty
earRust
ysol
d5,
000uni
tsofXs 102.I
fsal
esar
e$400,
000,
var
iabl
ecost
sar
e75%ofsal
es,
andoper
ati
ngi
ncome

and35,
000uni
tsofYs.Rel
ateddat
aar
e: i
s$50,
000,
whati
stheoper
ati
ngl
ever
age?

a. 2.
5

Uni
tSel
l
ing Uni
tVar
iabl
e Uni
tcont
ri
but
ion b. 7.
5

Pr
ice
c. 2.
0

Pr
oduct Pr
ice Cost Mar
gin
d. 0

X $110.
00 $70.
00 $40.
00
103.Whi
choft
hef
oll
owi
ngi
snotanassumpt
ionunder
lyi
ngcost
-vol
ume-
prof
it

Y 70.
00 50.
00 $20.
00 anal
ysi
s?

97.WhatwasRust
yCo.
ssal
esmi
xlasty
ear
? a. Thebr
eak-
evenpoi
ntwi
l
lbepasseddur
ingt
heper
iod.

a. 58%Xs,
42%Ys b. Tot
alsal
esandt
otal
cost
scanber
epr
esent
edbyst
rai
ghtl
i
nes.

b. 60%Xs,
40%Ys c. Cost
scanbeaccur
atel
ydi
vi
dedi
ntof
ixedandv
ari
abl
ecomponent
s.

c. 30%Xs,
70%Ys d. Thesal
esmi
xisconst
ant
.

d. 12.
5%Xs,
87.
5%Ys 104. Whenuni
tsmanuf
act
uredexceeduni
tssol
d:

98.WhatwasRust
yCo.
swei
ght
edav
erageuni
tsel
l
ingpr
ice? a. v
ari
abl
ecost
ingi
ncomeequal
sabsor
pti
oncost
ingi
ncome

a. $180.
00 b. v
ari
abl
ecost
ingi
ncomei
slesst
hanabsor
pti
oncost
ingi
ncome

b. $75.
00 c. v
ari
abl
ecost
ingi
ncomei
sgr
eat
ert
hanabsor
pti
oncost
ingi
ncome

c. $100.
00 d. v
ari
abl
ecost
ingi
ncomei
sgr
eat
erbyt
henumberofuni
tspr
oduced

mul
ti
pli
edbyt
hev
ari
abl
ecostr
ati
o.
d. $110.
00

99.WhatwasRust
yCo.
swei
ght
edav
erageuni
tvar
iabl
ecost
?

Har
oldCor
por
ati
onj
ustst
art
edbusi
nessi
nJanuar
y2012.Theyhadno
a. $52.
50
begi
nni
ngi
nvent
ori
es.Dur
ing2012t
heymanuf
act
ured12,
000uni
tsof

pr
oduct
,andsol
d10,
000uni
ts.Thesel
l
ingpr
iceofeachuni
twas$20.
b. $70.
00
Var
iabl
emanuf
act
uri
ngcost
swer
e$4peruni
t,andv
ari
abl
esel
l
ingand

c. $120.
00 admi
nist
rat
ivecost
swer
e$2peruni
t.Fi
xedmanuf
act
uri
ngcost
swer
e

$24,
000andf
ixedsel
l
ingandadmi
nist
rat
ivecost
swer
e$6,
000.
d. $50.
00

105. Whatwoul
dbet
heHar
oldCor
por
ati
onsneti
ncomef
or2012usi
ng
100.WhatwasRust
yCo.
swei
ght
edav
erageuni
tcont
ri
but
ionmar
gin?
absor
pti
oncost
ing?

a. $60.
00
a. $114,
000

b. $20.
00
b. $110,
000

c. $40.
00
c. $4,
000

d. $22.
50
d. $106,
000

101.Assumi
ngt
hatl
asty
ear
sfi
xedcost
stot
aled$675,
000.WhatwasRust
yCo.
s
106. Whatwoul
dbet
heHar
oldCor
por
ati
onsneti
ncomef
or2012usi
ngv
ari
abl
e
br
eak-
evenpoi
nti
nuni
ts?
cost
ing?

a. 16,
875uni
ts
a. $114,
000

b. 30,
100uni
ts
b. $110,
000
 c. $4,
000 $4,
000 2

d. $106,
000 $4,
500 3

107. Whatwoul
dbet
hedi
ff
erencei
nHar
oldCor
por
ati
onsneti
ncomef
or2012i
f $5,
000 4

t
heyusedv
ari
abl
ecost
ingi
nst
eadofabsor
pti
oncost
ing?

a. Nodi
ff
erence
a. mi
xedcost

b. $2,
000gr
eat
er
b. v
ari
abl
ecost

c. $4,
000l
ess
c. f
ixedcost

d. $6,
000l
ess
d. noneoft
heabov
e

108. Gi
vent
hef
oll
owi
ngcostdat
a,whatt
ypeofcosti
sshown?

Tot
alCost #ofuni
ts

$500 1

$1,
000 2

$1,
500 3

$2,
000 4

a. mi
xedcost

b. v
ari
abl
ecost

c. f
ixedcost

d. noneoft
heabov
e

109. Gi
vent
hef
oll
owi
ngcostdat
a,whatt
ypeofcosti
sshown?

Costperuni
t #ofuni
ts

$5,
000 1

$2,
500 2

$1,
667 3

$1,
250 4

a. mi
xedcost

b. v
ari
abl
ecost

c. f
ixedcost

d. noneoft
heabov
e

110. Gi
vent
hef
oll
owi
ngcostdat
a,whatt
ypeofcosti
sshown?

Tot
alCost #ofUni
ts

$3,
500 1