16. XYZ Company desires a profit of $120,000 and expects to sell 20,000
units. Variable cost per unit is $15 and total fixed costs are
$160,000. The selling price must be
a. $40.
b. $30.
c. $26.
d. $20.
a 17. Contribution margin percentage is 30% and contribution margin per unit
is $12. Which of the following is true?
a. Variable cost per unit is $28.
b. Return on sales is 12%.
c. Selling price is $48.
d. Variable cost percentage is 12%.
b 18. Contribution margin is 30% of sales. Profit is $80,000. Sales are
$600,000. Fixed costs are
a. $ 90,000.
b. $100,000.
c. $160,000.
d. $180,000.
a 19. TRS Company changed production methods, increasing fixed costs and
decreasing its per-unit variable costs. The change
a. increases risk and increases potential profit.
b. increases risk and decreases potential profit.
c. decreases risk and decreases potential profit.
d. decreases risk and increases potential profit.
c 20. Introducing income taxes into cost-volume-profit analysis
a. raises the break-even point.
b. lowers the break-even point.
c. increases unit sales needed to earn a particular target profit.
d. decreases the contribution margin percentage.
d 21. Selling price is $100, unit variable cost is $68, and fixed costs are
d. an amount that cannot be determined without more information.