A100 Midterm

Which of the following is true

• Total fixed costs vary exactly as the level of production varies.

• Variable costs are fixed per unit.

• The contribution margin per unit varies as the number of units varies.

• Fixed costs are fixed per unit.

Which of the following is true

• Changing the sales price per unit has no impact on the contribution margin percentage of total sales.

• An increase in the total number of units sold increases the contribution margin percentage.

• Fixed cost per unit decreases as the total sales increase.

• Variable cost per unit varies as the total sales vary.

Which of the following is true of the contribution margin income statement?

• The percentage of fixed costs to total sales remains constant.

• The total amount of variable costs remains constant.

• The breakeven point is the level of sales at which total sales equals variable costs plus fixed costs.

• Total fixed costs will always equal the contribution margin.

A company sells a product for $700 per unit and has $63,000 in fixed costs.  The variable cost per unit is $575.
How many units does the company need to sell to earn $50,000?

• 627 units

• 904 units

• 362 units

• 197 units

Last year Dallas Company reported sales of $640,000, a contribution margin of $160,000, and a net loss of $40,000. Based on this information, Dallas needed how much in total sales to breakeven?

• $800,000

• $640,000

• $480,000

• $720,000

The contribition margin is

• Difference between sales and variable costs

• difference between sales and operating income

• difference between sales and total costs

• amount by which sales exceed total costs

If the variable cost per unit goes up?

• The contribution margin decreases and the breakeven point increases.

• The contribution margin decreases and the breakeven point decreases.

• The contribution margin increases and the breakeven point decreases.

• The contribution margin increases and the breakeven point increases.

If a company sells one unit above the breakeven point, the net income would be equal to?

• zero

• unit selling price

• unit variable cost

• unit contribution margin

Which one of the costs are irrelevant to business decisions

• avoidable costs

• variable costs

• costs that differ between alternatives

• sunk costs

The act of granting division-level managers authority by top management is commonly referred to as a

• autonomy

• centralization

• decentralization

• is not done in business