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101
149) Barclay Enterprises manufactures and sells three distinct styles of bicycles: the Youth model sells
for $300 and has a unit contribution margin of $105; the Adult model sells for $850 and has a unit
contribution margin of $450; and the Recreational model sells for $1,000 and has a unit
contribution margin of $500. The company's sales mix includes: 5 Youth models; 9 Adult models;
and 6 Recreational models. If the firm's annual fixed costs total $6,500,000, calculate the firm's
contribution margin ratio per composite unit (rounded to the nearest whole percentage).
A) 200% B) 35% C) 50% D) 40% E) 53%
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150) Barclay Enterprises manufactures and sells three distinct styles of bicycles: the Youth model sells
for $300 and has a unit contribution margin of $105; the Adult model sells for $850 and has a unit
contribution margin of $450; and the Recreational model sells for $1,000 and has a unit
contribution margin of $500. The company's sales mix includes: 5 Youth models; 9 Adult models;
and 6 Recreational models. If the firm's annual fixed costs total $6,500,000, calculate the firm's
break-even point in total sales dollars.
A) $12,750,625.
B) $13,000,000.
C) $12,750,000.
D) $12,900,050.
E) $13,250,000.
151) Kent Manufacturing produces a product that sells for $50.00 and has variable costs of $24.00 per
unit. Fixed costs are $260,000. Kent can buy a new production machine that will increase fixed
costs by $11,400 per year, but will decrease variable costs by $3.50 per unit. Compute the
contribution margin per unit if the machine is purchased.
A) $26.00. B) $22.50. C) $28.50. D) $29.50. E) $27.50.
152) Kent Manufacturing produces a product that sells for $50.00 and has variable costs of $24.00 per
unit. Fixed costs are $260,000. Kent can buy a new production machine that will increase fixed
costs by $11,400 per year, but will decrease variable costs by $3.50 per unit. Compute the revised
break-even point in units if the new machine is purchased.
A) 8,814 units.
B) 10,000 units.
C) 9,200 units.
D) 9,869 units.
E) 10,438 units.
153) Kent Manufacturing produces a product that sells for $50.00. Fixed costs are $260,000 and variable
costs are $24.00 per unit. Kent can buy a new production machine that will increase fixed costs by
$11,400 per year, but will decrease variable costs by $3.50 per unit. What effect would the
purchase of the new machine have on Kent's break-even point in units?
A) 800 unit decrease.
B) 4,444 unit decrease.
C) 5,714 unit increase.
D) No effect on the break-even point in units.
E) 800 unit increase.
154) Kent Manufacturing produces a product that sells for $50.00. Fixed costs are $260,000 and variable
costs are $24.00 per unit. Kent can buy a new production machine that will increase fixed costs by
$11,400 per year, but will decrease variable costs by $3.50 per unit. Compute the revised break-
even point in dollars with the purchase of the new machine.
A) $521,923. B) $460,000. C) $500,000. D) $480,000. E) $440,678.
155) McCoy Brothers manufactures and sells two products, A and Z in the ratio of 5:2. Product A sells
for $75; Z sells for $95. Variable costs for product A are $35; for Z $40. Fixed costs are $418,500.
Compute the contribution margin per composite unit.
A) $330. B) $300. C) $200. D) $285. E) $310.
