chap 15 review

Z Co makes a single product and incurs fixed costs of $9,000 per month. The variable cost per unit is $3.00 and each unit sells for $7.00. Monthly sales demand is 8,000 units. What is the break-even point in units?

A firm makes a single product. Budgets have been prepared for the year ahead and include production and sales units 0f 60,000 units with a break-even point of 45,000 units. What is the margin of safety?

When is the breakeven point achieved?

• When the level of contribution is equal to total costs

• When the total variable costs are equal to total fixed costs

• When the total variable costs are equal to total contributions

• When the total contribution is equal to total fixed costs

A firm has discovered that the cost of raw material will decrease. If nothing else changes break-even point will?

• increase

• decrease

• no effect

• cannot be determined

A firm has discovered that cost of raw material will decrease. If nothing else changes margin of safety will?

• increase

• decrease

• no effect