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47) Carver Corporation produces a product which sells for $40. Variable manufacturing costs are
$18 per unit. Fixed manufacturing costs are $5 per unit based on the current level of activity, and
fixed selling and administrative costs are $4 per unit. A selling commission of 15% of the selling
price is paid on each unit sold. The contribution margin per unit is:
A) $7
B) $17
C) $22
D) $16
48) Coultrap Corporation has provided the following contribution format income statement.
Assume that the following information is within the relevant range.
Sales (3,000 units)
$
180,000
Variable expenses
117,000
Contribution margin
63,000
Fixed expenses
48,300
Net operating income
$
14,700
The contribution margin per unit is closest to:
A) $21.00
B) $60.00
C) $39.00
D) $4.90
49) Escareno Corporation has provided its contribution format income statement for June. The
company produces and sells a single product.
Sales (8,400 units)
$
764,400
Variable expenses
445,200
Contribution margin
319,200
Fixed expenses
250,900
Net operating income
$
68,300
If the company sells 8,200 units, its total contribution margin should be closest to:
A) $301,000
B) $311,600
C) $319,200
D) $66,674
50) Decaprio Inc. produces and sells a single product. The company has provided its contribution
format income statement for June.
Sales (8,800 units)
$
528,000
Variable expenses
290,400
Contribution margin
237,600
Fixed expenses
211,700
Net operating income
$
25,900
If the company sells 9,200 units, its net operating income should be closest to:
A) $27,077
B) $49,900
C) $36,700
D) $25,900
51) Warrix Corporation has provided the following contribution format income statement.
Assume that the following information is within the relevant range.
Sales (3,000 units)
$
120,000
Variable expenses
90,000
Contribution margin
30,000
Fixed expenses
27,000
Net operating income
$
3,000
If sales increase to 3,020 units, the increase in net operating income would be closest to:
A) $800.00
B) $20.00
C) $600.00
D) $200.00
52) Thomason Corporation has provided the following contribution format income statement.
Assume that the following information is within the relevant range.
Sales (1,000 units)
$
40,000
Variable expenses
30,000
Contribution margin
10,000
Fixed expenses
7,000
Net operating income
$
3,000
If the variable cost per unit increases by $1, spending on advertising increases by $2,000, and
unit sales increase by 50 units, the net operating income would be closest to:
A) $450
B) $1,000
C) $2,150
D) $9,450
53) Duve Corporation has provided the following contribution format income statement. Assume
that the following information is within the relevant range.
Sales (2,000 units)
$
40,000
Variable expenses
24,000
Contribution margin
16,000
Fixed expenses
11,200
Net operating income
$
4,800
If the selling price increases by $4 per unit and the sales volume decreases by 200 units, the net
operating income would be closest to:
A) $7,200
B) $12,800
C) $10,400
D) $11,520
54) Ploeger Corporation has provided the following contribution format income statement.
Assume that the following information is within the relevant range.
Sales (4,000 units)
$
240,000
Variable expenses
156,000
Contribution margin
84,000
Fixed expenses
81,900
Net operating income
$
2,100
The break-even point in dollar sales is closest to:
A) $234,000
B) $237,900
C) $156,000
D) $0
55) The following information pertains to Nova Co.'s cost-volume-profit relationships:
Breakeven point in units sold
1,000
Variable expenses per unit
$
500
Total fixed expenses
$
150,000
How much will be contributed to net operating income by the 1,001st unit sold?
A) $650
B) $500
C) $150
D) $0
56) Mishoe Corporation has provided the following contribution format income statement.
Assume that the following information is within the relevant range.
Sales (1,000 units)
$
50,000
Variable expenses
32,500
Contribution margin
17,500
Fixed expenses
12,250
Net operating income
$
5,250
The break-even point in unit sales is closest to:
A) 0 units
B) 895 units
C) 700 units
D) 650 units
57) Stockmaster Corporation has provided the following contribution format income statement.
Assume that the following information is within the relevant range.
Sales (8,000 units)
$
320,000
Variable expenses
192,000
Contribution margin
128,000
Fixed expenses
121,600
Net operating income
$
6,400
The margin of safety in dollars is closest to:
A) $6,400
B) $16,000
C) $121,600
D) $128,000
58) Hedman Corporation has provided the following contribution format income statement.
Assume that the following information is within the relevant range.
Sales (9,000 units)
$
270,000
Variable expenses
202,500
Contribution margin
67,500
Fixed expenses
63,750
Net operating income
$
3,750
The margin of safety percentage is closest to:
A) 75%
B) 1%
C) 6%
D) 24%
59) Cassius Corporation has provided the following contribution format income statement.
Assume that the following information is within the relevant range.
Sales (7,000 units)
$
210,000
Variable expenses
136,500
Contribution margin
73,500
Fixed expenses
67,200
Net operating income
$
6,300
The number of units that must be sold to achieve a target profit of $31,500 is closest to:
A) 42,000 units
B) 16,400 units
C) 35,000 units
D) 9,400 units
60) Goodman Corporation has sales of 3,000 units at $80 per unit. Variable costs are 35% of the
sales price. If total fixed costs are $66,000, the degree of operating leverage is:
A) 0.79
B) 0.93
C) 2.67
D) 1.73
61) Jilk Inc.'s contribution margin ratio is 58% and its fixed monthly expenses are $36,000.
Assuming that the fixed monthly expenses do not change, what is the best estimate of the
company's net operating income in a month when sales are $103,000?
A) $23,740
B) $59,740
C) $67,000
D) $7,260
62) Gayne Corporation's contribution margin ratio is 12% and its fixed monthly expenses are
$84,000. If the company's sales for a month are $738,000, what is the best estimate of the
company's net operating income? Assume that the fixed monthly expenses do not change.
A) $565,440
B) $654,000
C) $88,560
D) $4,560
63) Creswell Corporation's fixed monthly expenses are $29,000 and its contribution margin ratio
is 56%. Assuming that the fixed monthly expenses do not change, what is the best estimate of the
company's net operating income in a month when sales are $95,000?
A) $12,800
B) $24,200
C) $53,200
D) $66,000
64) Northern Pacific Fixtures Corporation sells a single product for $28 per unit. If variable
expenses are 65% of sales and fixed expenses total $9,800, the break-even point is:
A) $15,077
B) $18,200
C) $9,800
D) $28,000
65) Variable expenses for Alpha Corporation are 40% of sales. What are sales at the break-even
point, assuming that fixed expenses total $150,000 per year:
A) $250,000
B) $375,000
C) $600,000
D) $150,000
66) Moyas Corporation sells a single product for $20 per unit. Last year, the company's sales
revenue was $300,000 and its net operating income was $24,000. If fixed expenses totaled
$96,000 for the year, the break-even point in unit sales was:
A) 12,000 units
B) 9,900 units
C) 15,000 units
D) 14,100 units
