Deck 9: Cost-Volume-Profit Analysis

Question 1

The difference between sales and variable costs is called:

A) net income.
B) gross profit
C) contribution margin.
D) cost of goods manufactured.

Answer 1

C

Question 2

All else being equal,which of the following would not cause the contribution margin to increase?

A) A decrease in variable costs per unit
B) An increase in sales volume
C) A decrease in fixed costs per unit
D) An increase in the sales price per unit

Answer 2

C

Question 3

Which of the following would you not find on a traditional income statement?

A) Net income
B) Gross profit
C) Contribution margin
D) Sales revenue

Answer 3

C

Question 4

The contribution margin income statement is structured in such a way as to emphasise:

A) cost functionality.
B) cost behaviour.
C) organisational efficiency.
D) cost drivers.

Question 5

The difference between sales and cost of goods sold is called:

A) net income.
B) gross profit.
C) contribution margin.
D) finished goods inventory.

Question 6

Which of the following statements is true regarding the traditional income statement?

A) Sales revenue is based on the units produced rather than the units sold.
B) It will include a subtotal called contribution margin.
C) It will group costs into categories based on their behaviour (fixed versus variable).
D) It is required for external reporting purposes.

Question 7

When preparing a contribution margin income statement,it is necessary to break down costs into what two categories?

A) Direct materials and indirect materials
B) Product and period
C) Variable and fixed
D) Avoidable and unavoidable

Question 8

Which of the following is usually not one of the factors that cost-volume-profit analysis focuses on?

A) Sales prices of products
B) Mix of products or services produced
C) Variable costs per unit
D) Fixed costs per unit

Question 9

All else being equal,which of the following would cause the contribution margin to increase?

A) An increase in variable costs per unit
B) An increase in total variable costs
C) A decrease in total fixed costs
D) An increase in sales volume

Question 10

The traditional income statement focuses on:

A) cost function
B) cost behaviour
C) contribution margin.
D) variable costing.

Question 11

Which of the following statements is false regarding the contribution margin income statement?

A) It will group costs into categories based on their behaviour (fixed versus variable).
B) It will include a subtotal called gross profit.
C) It is not allowed for external reporting purposes.
D) It is used by management to perform cost-volume-profit analysis.

Question 12

Assuming a company has net income,which of the following statements is true regarding the contribution margin per unit?

A) It will decrease as the number of units sold increases.
B) It will decrease as the number of units sold decreases.
C) It indicates the amount that net income will increase with the sale of each additional unit.
D) It indicates the amount that variable costs will decrease with the sale of each additional unit.

Question 13

Which of the following accounting system outputs is not needed for cost-volume-profit analysis?

A) Sales price per unit
B) Variable costs per unit
C) Total fixed costs
D) Fixed cost per unit

Question 14

The __________ represents the amount of each additional sales dollar that contributes towards the payment of fixed costs and,ultimately,net profit.

A) contribution margin ratio
B) contribution margin per unit
C) break-even point
D) variable cost per unit

Question 15

All else being equal,which of the following would not cause the contribution margin to decrease?

A) An increase in total variable costs
B) A decrease in sales volume
C) A decrease in variable costs per unit
D) A decrease in the sales price per unit

Question 16

All else being equal,which of the following would cause net income to increase?

A) An increase in total variable costs
B) A decrease in total fixed costs
C) A decrease in sales price per unit
D) A decrease in contribution margin

Question 17

For each additional unit sold,the contribution margin per unit:

A) will increase.
B) will decrease.
C) will stay the same.
D) can not be predicted.

Question 18

Which of the following would you not find on a contribution margin income statement?

A) Net income
B) Gross profit
C) Contribution margin
D) Sales revenue

Question 19

When preparing a traditional income statement,it is necessary to break down costs into what two categories?

A) Direct materials and indirect materials
B) Product and period
C) Variable and fixed
D) Avoidable and unavoidable

Question 20

Assuming a company has net income,with the sale of each additional unit,net income will increase by the ___________.

A) contribution margin ratio
B) contribution margin per unit
C) sales price per unit
D) fixed cost per unit

Question 21

Refer to the Joe’s Coffee House information below.
Joe’s Coffee House
Joe’s Coffee House has the following information available for the month of July:
$\begin{array}{lr}\text { Sales }(2500 \text { cups) } & \$ 7500 \\\text { Variable costs } & 3250 \\\text { Fixed costs } & 4000 \\\text { Net Income } & \$ \quad 250\end{array}$

-All else being equal,if Joe's increases the sales price per unit by 10%,net income will:

A) increase by $425.
B) increase by $750.
C) increase by $75.
D) not change.

Question 22

Jazz Products has the following information available for the month of March:
$\begin{array}{lr}\text { Sales (4000 units) } & \$ 40000 \\\text { Variable costs } & 18000 \\\text { Fixed costs } & 5000 \\\text { income } & \$ 17000\end{array}$
The company's manager is considering several options to increase net income.By what amount do sales dollars need to increase in order for net income to increase to $25 000?

A) $14 545
B) $25 000
C) $ 3000
D) $18 820

Question 23

If a company has a positive contribution margin but net income is low or negative,what are some ways of increasing net income?

A) Increase sales price
B) Increase sales volume
C) Decrease variable costs
D) All of these are ways to increase net income

Question 24

If the sales price per unit is $30 and the company expects a 30% increase in sales volume this year along with a 20% decrease in fixed costs,what will be expected net income this year?

A) $30 850
B) $41 065
C) $23 155
D) $29 365

Question 25

Carolina Products
Carolina Products sells a unique item with the following information available:
$\begin{array}{ll}\text { Sales price } & \$ 40 \text { per unit } \\\text { Variable costs } & \$ 12 \text { per unit } \\\text { Fixed Costs } & \$ 2 \text { per unit } \\\text { Units produced and sold } & 2000\end{array}$

-What is the contribution margin per unit?

A) $26
B) $38
C) $52
D) $28

Question 26

Carolina Products
Carolina Products sells a unique item with the following information available:
$\begin{array}{ll}\text { Sales price } & \$ 40 \text { per unit } \\\text { Variable costs } & \$ 12 \text { per unit } \\\text { Fixed Costs } & \$ 2 \text { per unit } \\\text { Units produced and sold } & 2000\end{array}$

-What is the contribution margin ratio?

A) 30%
B) 70%
C) 65%
D) 35%

Question 27

Haywood Inc.has the following information available for one of its products:
$$\begin{array} { l l } \text { Sales price per unit } & \$ 15 \\\text { Contribution margin ratio } & 60 \% \\\text { Total fixed costs } & \$ 5000 \\\text { Units prodiced and sold } & 1000\end{array}$$
If Haywood sells one more unit,net income will:

A) increase by $4.
B) increase by $6.
C) increase by $9.
D) increase by $15.

Question 28

Refer to Hunter Inc. information below.
Hunter Inc.
Hunter Inc. sells a unique product with the following information available:
$\begin{array}{ll}\text { Sales price } & \$ 85 \text { per unit } \\\text { Variable costs } & \$ 25 \text { per unit } \\\text { Fixed Costs } & \$ 10000 \\\text { Units produced and sold } & 1250\end{array}$

-What is the contribution margin ratio?

A) 41.67%
B) 2.40%
C) 70.59%
D) 61.18%

Question 29

Refer to Hunter Inc. information below.
Hunter Inc.
Hunter Inc. sells a unique product with the following information available:
$\begin{array}{ll}\text { Sales price } & \$ 85 \text { per unit } \\\text { Variable costs } & \$ 25 \text { per unit } \\\text { Fixed Costs } & \$ 10000 \\\text { Units produced and sold } & 1250\end{array}$

-If one more unit is sold,net income will:

A) decrease by $33.
B) increase by $52.
C) increase by $60.
D) decrease by $8.

Question 30

Refer to the Stealth Software Inc. information below.
Stealth Software Inc.
Stealth Software Inc. has the following information available from last year for one of its software products:
$\begin{array}{lr}\text { Sales revenue } & \$ 30000 \\\text { Variable costs } & 4950 \\\text { Fixed costs } & 4000 \\\text { Net income } & \$ 21050\end{array}$

-If the software had a sales price of $30 per unit,what is the variable cost per unit?

A) $165.00
B) $ .20
C) $ 25.05
D) $ 4.95

Question 31

All else being equal,which of the following changes would increase a company's net income?

A) An increase in fixed costs
B) A decrease in contribution margin
C) An increase in variable costs
D) A decrease in fixed costs

Question 32

Refer to the Joe’s Coffee House information below.
Joe’s Coffee House
Joe’s Coffee House has the following information available for the month of July:
$\begin{array}{lr}\text { Sales }(2500 \text { cups) } & \$ 7500 \\\text { Variable costs } & 3250 \\\text { Fixed costs } & 4000 \\\text { Net Income } & \$ \quad 250\end{array}$

-Each additional cup of coffee sold will increase net income by:

A) $1.70
B) $3.00
C) $1.00
D) $ .57

Question 33

Refer to the Stealth Software Inc. information below.
Stealth Software Inc.
Stealth Software Inc. has the following information available from last year for one of its software products:
$\begin{array}{lr}\text { Sales revenue } & \$ 30000 \\\text { Variable costs } & 4950 \\\text { Fixed costs } & 4000 \\\text { Net income } & \$ 21050\end{array}$

-If the software had a sales price of $30 per unit,what is the contribution margin per unit?

A) $34.95
B) $21.05
C) $25.05
D) Cannot be determined

Question 34

If sales revenue stays the same but the contribution margin ratio decreases,then:

A) net income will increase.
B) fixed costs will decrease.
C) net income will decrease.
D) fixed costs will increase.

Question 35

Carolina Products
Carolina Products sells a unique item with the following information available:
$\begin{array}{ll}\text { Sales price } & \$ 40 \text { per unit } \\\text { Variable costs } & \$ 12 \text { per unit } \\\text { Fixed Costs } & \$ 2 \text { per unit } \\\text { Units produced and sold } & 2000\end{array}$

-If one more unit is sold,net income will:

A) increase by $28.
B) increase by $26.
C) increase by $40.
D) increase by $38.

Question 36

Refer to the Joe’s Coffee House information below.
Joe’s Coffee House
Joe’s Coffee House has the following information available for the month of July:
$\begin{array}{lr}\text { Sales }(2500 \text { cups) } & \$ 7500 \\\text { Variable costs } & 3250 \\\text { Fixed costs } & 4000 \\\text { Net Income } & \$ \quad 250\end{array}$

-If Joe's sells 500 more cups of coffee per month,net income will:

A) increase by $850.
B) increase by $100.
C) increase by $150.
D) increase by $1500.

Question 37

Assuming a company has a positive contribution margin,which of the following changes will cause net income to increase?

A) A decrease in variable costs
B) A decrease in the sale price
C) An increase in total fixed costs
D) A decrease in the sales volume

Question 38

Which of the following statements is true when making decisions using cost-volume-profit (CVP)analysis?

A) As long as the contribution margin is a positive number,net income will be positive.
B) As long as variable costs are more than fixed costs,net income will be negative.
C) As long as the contribution margin is greater than fixed costs,net income will be positive.
D) As long as the sales price per unit is greater than fixed costs per unit,net income will be positive.

Question 39

Laverne's Soda Shop wishes to decrease variable costs.Which of the following options should she consider?

A) A decrease in advertising costs
B) A decrease in rent
C) A decrease in direct labour costs
D) An increase in equipment rentals

Question 40

Last year,Brown Manufacturing had a contribution margin ratio of 40%.This year,fixed expenses are expected to remain at $50 000 and sales are expected to increase by $90 000.What should the contribution margin ratio be this year if the company wishes to increase net income by $31 500?

A) 78.75%
B) 40.00%
C) 35.00%
D) 55.56%

Question 41

Cameron Corp.
Cameron Corp. has the following product information:
$$\begin{array} { l l } \text { Sales price } & \$ 20 \text { per unit } \\\text { Contribution margin ratio } & 35 \% \\\text { Fixed costs } & \$ 59500\end{array}$$

-What is the break-even point in units?

A) 8500
B) 2975
C) 1041
D) 170 000

Question 42

Cameron Corp.
Cameron Corp. has the following product information:
$$\begin{array} { l l } \text { Sales price } & \$ 20 \text { per unit } \\\text { Contribution margin ratio } & 35 \% \\\text { Fixed costs } & \$ 59500\end{array}$$

-What is the break-even point in sales dollars?

A) $ 20 825
B) $ 59 500
C) $170 000
D) $416 500

Question 43

A company's manager estimates that in the upcoming year,total variable costs will increase by $5000 and total fixed costs will increase by $3000.What will be the anticipated effect on net income?

A) Net income will increase by $8000.
B) Net income will decrease by $8000.
C) Net income will increase by $2000.
D) Net income will decrease by $2000.

Question 44

Poole Products Inc.
Poole Products Inc. has the following product information available:
$\begin{array}{ll}\text { Sales price } & \$ 25 \text { per unit } \\\text { Variable costs } & \$ 10 \text { per unit } \\\text { Fixed costs } & \$ 36000\end{array}$

-What is the break-even point in sales dollars?

A) $21 600
B) $36 000
C) $60 000
D) $90 000

Question 45

A company's manager estimates that in the upcoming year,total variable costs will increase by $20 000 and total fixed costs will decrease by $14 000.What will be the anticipated effect on net income?

A) Net income will increase by $34 000.
B) Net income will decrease by $34 000.
C) Net income will increase by $6000.
D) Net income will decrease by $6000.

Question 46

Harrison Manufacturing
Harrison Manufacturing has the following product information available:
$\begin{array}{ll}\text { Sales price } & \$ 50 \text { per unit } \\\text { Variable costs } & \$ 26 \text { per unit } \\\text { Fixed costs } & \$ 87600\end{array}$

-What is the break-even point in units?

A) 3369
B) 1752
C) 3650
D) 1153

Question 47

Harrison Manufacturing
Harrison Manufacturing has the following product information available:
$\begin{array}{ll}\text { Sales price } & \$ 50 \text { per unit } \\\text { Variable costs } & \$ 26 \text { per unit } \\\text { Fixed costs } & \$ 87600\end{array}$

-What do total sales dollars need to be in order to earn a target profit of $200 400?

A) $235 000
B) $600 000
C) $288 000
D) $417 500

Question 48

A company's manager estimates that in the upcoming year,increasing advertising costs by $25 000 will cause sales revenue to increase by $60 000.If the company's contribution margin ratio is 35%,what will be overall effect on net income?

A) Net income will increase by $12 250.
B) Net income will increase by $29 750.
C) Net income will increase by $35 000.
D) Net income will decrease by $4000.

Question 49

Tucker Corp.
Tucker Corp. has the following product information:
$$\begin{array} { l l } \text { Sales price } & \$ 12 \text { per unit } \\\text { Contribution margin ratio } & 40 \% \\\text { Fixed costs } & \$ 45000\end{array}$$

-How many units need to be sold in order to earn a target profit of $542 400?

A) 234 960
B) 216 960
C) 113 000
D) 122 375

Question 50

Refer to the Bergman Inc. information below.
Bergman Inc.
Bergman Inc. has the following product information available:
$\begin{array}{ll}\text { Sales price } & \$ 12 \text { per unit } \\\text { Variable costs } & \$ 4 \text { per unit } \\\text { Fixed costs } & \$ 15600 \\\text { Units sold } & 10400\end{array}$


-What is the break-even point in units?

A) 1950
B) 891
C) 975
D) 2400

Question 51

How many units need to be sold in order to earn a target profit of $249 000?

A) 8143
B) 14 200
C) 16 600
D) 19 000

Question 52

Harrison Manufacturing
Harrison Manufacturing has the following product information available:
$\begin{array}{ll}\text { Sales price } & \$ 50 \text { per unit } \\\text { Variable costs } & \$ 26 \text { per unit } \\\text { Fixed costs } & \$ 87600\end{array}$

-How many units need to be sold in order to earn a target profit of $175 000?

A) 10 942
B) 7292
C) 3642
D) 5252

Question 53

A company's manager estimates that in the upcoming year,decreasing advertising costs by $35 000 will cause sales revenue to decrease by $80 000.If the company's contribution margin ratio is 40%,what will be overall effect on net income?

A) Net income will increase by $3000.
B) Net income will decrease by $3000.
C) Net income will increase by $18 000.
D) Net income will decrease by $18 000.

Question 54

Angelo's is a locally run and operated pizza parlour.Last month,the restaurant broke-even when 400 pizzas were served.The average variable costs per pizza are $2.50 and fixed costs for the month totalled $6000.What is the average selling price of a pizza?

A) $15.00
B) $12.50
C) $17.50
D) $ 6.00

Question 55

Harrison Manufacturing
Harrison Manufacturing has the following product information available:
$\begin{array}{ll}\text { Sales price } & \$ 50 \text { per unit } \\\text { Variable costs } & \$ 26 \text { per unit } \\\text { Fixed costs } & \$ 87600\end{array}$

-What is the break-even point in sales dollars?

A) $ 87 600
B) $ 42 048
C) $168 462
D) $182 500

Question 56

Tucker Corp.
Tucker Corp. has the following product information:
$$\begin{array} { l l } \text { Sales price } & \$ 12 \text { per unit } \\\text { Contribution margin ratio } & 40 \% \\\text { Fixed costs } & \$ 45000\end{array}$$

-What is the break-even point in units?

A) 1500
B) 112 500
C) 216 000
D) 9375

Question 57

Cameron Corp.
Cameron Corp. has the following product information:
$$\begin{array} { l l } \text { Sales price } & \$ 20 \text { per unit } \\\text { Contribution margin ratio } & 35 \% \\\text { Fixed costs } & \$ 59500\end{array}$$

-How many units need to be sold in order to earn a target profit of $299 950?

A) 42 850
B) 51 350
C) 34 350
D) 125 808

Question 58

Refer to the Bergman Inc. information below.
Bergman Inc.
Bergman Inc. has the following product information available:
$\begin{array}{ll}\text { Sales price } & \$ 12 \text { per unit } \\\text { Variable costs } & \$ 4 \text { per unit } \\\text { Fixed costs } & \$ 15600 \\\text { Units sold } & 10400\end{array}$

-How many units need to be sold in order to earn a target profit of $150 000?

A) 25 477
B) 20 700
C) 10 350
D) 18 750

Question 59

Poole Products Inc.
Poole Products Inc. has the following product information available:
$\begin{array}{ll}\text { Sales price } & \$ 25 \text { per unit } \\\text { Variable costs } & \$ 10 \text { per unit } \\\text { Fixed costs } & \$ 36000\end{array}$

-What is the break-even point in units?

A) 1029
B) 1440
C) 2400
D) 5400

Question 60

Tucker Corp.
Tucker Corp. has the following product information:
$$\begin{array} { l l } \text { Sales price } & \$ 12 \text { per unit } \\\text { Contribution margin ratio } & 40 \% \\\text { Fixed costs } & \$ 45000\end{array}$$

-What is the break-even point in sales dollars?

A) $ 45 000
B) $112 500
C) $ 18 000
D) $ 3750

Question 61

How many Rubles need to be sold in order for the company to break even?

A) 1638
B) 1668
C) 819
D) 2780

Question 62

Mulvaney Inc.ignored the effect of income taxes in its calculation of the sales volume needed to achieve a target profit of $1 000 000.If the company considers the impact of income taxes in its calculation,which of the following statements would be true?

A) Total fixed costs will increase.
B) Contribution margin per unit will decrease.
C) Sales volume to reach an after-tax profit will increase.
D) Sales price per unit will decrease.

Question 63

If Charlie does expand his business to three stands,how many hotdogs will need to be sold per month in order to earn a target profit of $5000?

A) 2500
B) 3100
C) 3500
D) 2800

Question 64

In a multiproduct environment:

A) cost-volume-profit analysis should not be used.
B) only the product with the highest contribution margin should be sold.
C) the product with the highest sales prices per unit should account for the majority of the sales.
D) a weighted-average contribution margin per unit should be computed for all products produced and sold.

Question 65

Floyd's Barbershop has fixed costs of $3000 per month.Floyd currently breaks even when it performs 400 haircuts a month.Floyd charges customers $10 per cut.What are Floyd's variable costs per cut?

A) $ 2.50
B) $ 7.50
C) $17.50
D) $ 1.33

Question 66

Poole Products Inc.has the following product information available:
$\begin{array}{ll}\text { Sales price } & \$ 25 \text { per unit } \\\text { Variable costs } & \$ 10 \text { per unit } \\\text { Fixed costs } & \$ 36 \text { 000 }\end{array}$
If Poole is in the 40% tax bracket,how many units need to be sold in order to earn an after-tax target profit of $249 000?

A) 30 067
B) 12 360
C) 27 667
D) 31 667

Question 67

Village Manufacturing
Village Manufacturing produces two types of products ? Card Games and Puzzles. The following information is available related to each product:
$\begin{array}{lrrr} & \underline{ \text { Card Games }} & \underline{\text { Puzzles }} \\\text { Sales price per unit } & \$ 6.00 & \$ 15.00 \\\text { Variable costs per unit } & 2.00 & & 3.50\end{array}$
60% of the products sold are Card Games and 40% are Puzzles.

-If total fixed costs are $24 500,how many Card Games need to be sold in order for the company to break even?

A) 2100
B) 3675
C) 4200
D) 3500

Question 68

If Charlie does expand his business to three stands,how many additional hotdogs will need to be sold per month in order to break even?

A) 1000
B) 600
C) 200
D) 480

Question 69

Crabtree Inc.produces two types of products - Gizmos and Gadgets.The following information is available related to each product:
$\begin{array}{lrrr}& \underline{\text { Gizmos } }&\underline{ \text { Gadgets }} \\\text { Sales price per unit } & \$ 48 & \$ 60 \\\text { Variable costs per unit } & 21 & 24 \\\\\text { Percentage of total sales } & 66.67 \% & 33.33 \%\end{array}$
If total fixed costs are $36 000,how many total units need to be sold in order for the company to break even? (round computations to nearest hundredth)

A) 581
B) 1162
C) 1200
D) 405

Question 70

Harrison Manufacturing has the following product information available:
$\begin{array}{ll}\text { Sales price } & \$ 50 \text { per unit } \\\text { Variable costs } & \$ 26 \text { per unit } \\\text { Fixed costs } & \$ 87600\end{array}$
If Harrison is in the 35% tax bracket,how many units need to be sold in order to earn an after-tax target profit of $260 000?

A) 16 667
B) 14 483
C) 22 282
D) 20 317

Question 71

LMN Manufacturing produces two products - Product S and Product W.The following information is available related to each product:
$\begin{array} { l }& \text { Product S }& \text { Product W}\\ \text { Sales price per unit }&\$25&\$40\\ \text {Variable costs per unit }&17&22\\\end{array}$

Product S accounts for 40% of total product sales and Product W accounts for the rest.LMN's total fixed costs are $24 990.How many total number of products need to be sold in order for the company to break even?

A) 1922
B) 2403
C) 962
D) 1785

Question 72

Crabtree Inc.produces two types of products - Gizmos and Gadgets.The following information is available related to each product:
$\begin{array}{lrrr} & \underline{\text { Gizmos } }& \underline{\text { Gadgets} } \\\text { Sales price per unit }& \$ 80 & \$ 50 \\\text { Variable costs per unit } & 36 & 22\end{array}$
Three-fourths of the products sold are Gizmos and one-fourth are Gadgets.If total fixed costs are $50 000,how many total units need to be sold in order for the company to break even?

A) 1250
B) 1389
C) 2500
D) 690

Question 73

Grisham Inc.wishes to have an after-tax profit of $400 000.If Grisham's tax rate is 35%,what is their before-tax profit?

A) $ 615 385
B) $ 540 000
C) $1 142 857
D) $ 660 000

Question 74

Floyd's Barbershop has fixed costs of $3000 per month.Floyd regularly performs 400 haircuts a month and he does not anticipate this to change.Each haircut has a variable cost of $4.00.If Floyd would like to earn a target profit of $2000,what does he need to charge for each haircut?

A) $12.50
B) $16.50
C) $11.50
D) $ 8.50

Question 75

Which of the following statements is correct as it relates to a company that sells multiple products?

A) CVP analysis cannot be used.
B) Contribution margin is based on sales mix.
C) CVP analysis is much easier to use.
D) The break-even point remains the same even if sales mix changes.

Question 76

When considering the impact of income taxes on the sales volume needed to achieve a desired after-tax profit,which of the following statements is true?

A) Fixed costs will increase.
B) As the tax rate increases,the number of units that need to be sold will decrease.
C) The before-tax profit will need to be calculated.
D) The contribution margin per unit will decrease.

Question 77

Village Manufacturing
Village Manufacturing produces two types of products ? Card Games and Puzzles. The following information is available related to each product:
$\begin{array}{lrrr} & \underline{ \text { Card Games }} & \underline{\text { Puzzles }} \\\text { Sales price per unit } & \$ 6.00 & \$ 15.00 \\\text { Variable costs per unit } & 2.00 & & 3.50\end{array}$
60% of the products sold are Card Games and 40% are Puzzles.

-If total fixed costs are $24 500,how many Puzzles need to be sold in order for the company to break even?

A) 852
B) 1265
C) 1400
D) 3500

Question 78

When calculating the break-even point in a multiproduct environment,which of the following pieces of information would not be relevant?

A) Contribution margin per unit for each type of product
B) Each product's percentage of total sales
C) Total fixed costs
D) Fixed costs per unit

Question 79

When calculating the break-even point in a multiproduct environment,which of the following statements is false?

A) The contribution margin per unit for each product needs to be determined.
B) Total fixed costs need to be determined.
C) Each product is assumed to count for an equal percentage of total sales.
D) The weighted-average contribution margin per unit needs to be determined.

Question 80

How many total number of products need to be sold in order for the company to break even?

A) 2780
B) 2730
C) 5560
D) 2176