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EWL Corporation Sells Its Product for $130 Per Unit

Question 184

Matching

EWL Corporation sells its product for $130 per unit. Its total cost function is TC = $15,000 + $80Q. EWL's production capacity is 500 units per month. It normally operates at 80% of capacity. Match the lettered items with the appropriate item. Each numbered item has only one correct answer. Each lettered item may be used once, more than once, or not at all.

Premises:
Breakeven point in units
Contribution margin / Profit
Actual unit activity minus Breakeven point in units
Breakeven point in sales dollars
Margin of safety in revenue dollars under normal operations
Margin of safety in units when operating at full capacity
Responses:
$ 15,000
200
Margin of safety
None of the above
400
100
$39,000
Degree of operating leverage
300

Correct Answer:

$ 15,000
200
Margin of safety
None of the above
400
100
$39,000
Degree of operating leverage
300
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