1.

The following is last month's contribution format income statement:

   

What is the company's break-even in unit sales? 

A. 0 units
B. 12,000 units
C. 6,000 units
D. 8,000 units
Contribution margin per unit = $400,000 10,000 units = $40 per unit
Break-even point in units = $240,000 $40 = 6,000 units
2. Witting Corporation produces and sells a single product. Data concerning
that product appear below:

   

The break-even in monthly unit sales is closest to: 

A. 2,523
B. 1,502
C. 3,337
D. 2,730
Contribution margin per unit = $130.00 - $58.50 = $71.50
Break-even point in units = $195,195 $71.50
= 2,730

 
3. Data concerning Enslow Corporation's single product appear below:

   

The break-even in monthly unit sales is closest to: 

A. 6,711
B. 4,390
C. 12,495
D. 3,249
Contribution margin per unit = $200 - $52 = $148
Break-even point in units = $649,720 $148
= 4,390
4. Steckelberg Inc. produces and sells a single product. The selling price of the
product is $150.00 per unit and its variable cost is $54.00 per unit. The fixed
expense is $154,560 per month. The break-even in monthly unit sales is closest
to: 
A. 1,610
B. 1,030
C. 1,834
D. 2,862
Contribution margin per unit = $150 - $54 = $96
Break-even point in units = $154,560 $96
= 1,610
5. Terres Corporation produces and sells a single product. Data concerning that
product appear below:

   

The break-even in monthly dollar sales is closest to: 

A. $889,273
B. $438,000
C. $293,460
D. $540,244
Contribution margin per unit = $100 - $33 = $67
Contribution margin ratio = $67 $100 = 67%
Break-even point in dollars = $293,460 67%
= $438,000

 
 
6. Data concerning Vogelgesang Corporation's single product appear below:

   

The break-even in monthly dollar sales is closest to: 

A. $850,000
B. $527,000
C. $921,281
D. $1,386,842
Contribution margin per unit = $200 - $76 = $124
Contribution margin ratio = $124 $200 = 62%
Break-even point in dollars = $527,000 62%
= $850,000

 
 
7. Zents Inc. produces and sells a single product. The selling price of the product is
$240.00 per unit and its variable cost is $108.00 per unit. The fixed expense is
$407,880 per month.

The break-even in monthly dollar sales is closest to: 

A. $685,293
B. $741,600
C. $906,400
D. $407,880
Contribution margin per unit = $240 - $108 = $132
Contribution margin ratio = $132 $240 = 55%
Break-even point in dollars = $407,880 55%
= $741,600

 
8. A product sells for $20 per unit, and has a contribution margin ratio of 40%.
Fixed expenses are $120,000. How many units must be sold to yield a profit
of $30,000? 
A. 18,750
B. 20,000
C. 25,000
D. 12,500
Contribution margin per unit = $20 x 40% = $8
Sales in units needed = ($120,000 + $30,000) $8 = 18,750

 
9. Harist Corporation sold 5,000 units in May. Sales were $400,000, variable
expenses were $240,000, and fixed expenses were $120,000. If the company
increases its selling price by 10%, how many units would have to be sold in June
to generate a profit of $40,000? 
A. 4,200
B. 4,500
C. 4,000
D. 5,000
Sales price per unit = ($400,000 5,000 units) x (100% + 10%) = $88.00
Variable expense per unit = $240,000 5,000 units = $48.00
Sales = Variable expenses + Fixed expenses + Profit
$88.00Q = $48.00Q + $120,000 + $40,000
$40.00Q = $160,000
Q = $160,000 $40.00 per unit = 4,000
10. Austin Manufacturing had the following operating data for the year just ended.

   

Management plans to improve the quality of its only product by: (1) replacing a
component that costs $3.50 with a higher-grade component that costs $5.50; and
(2) renting a packing machine for $18,000 a year. If the desired target profit is
$288,000, the company must sell: 
A. 19,300 units
B. 21,316 units
C. 22,500 units
D. 20,842 units
Contribution margin per unit = $60 - $22 - $2* = $36
* increase in variable cost per unit ($5.50 - $3.50)
Break-even point in units = ($504,000 + $18,000 + $288,000) $36
= 22,500 units
11. Lempka Corporation produces and sells a single product. Data concerning that
product appear below:

   

The unit sales to attain the company's monthly target profit of $17,000 is closest
to: 
A. 4,172
B. 4,520
C. 2,169
D. 3,620
Contribution margin per unit = $190.00 - $91.20 = $98.80
Sales needed to achieve target profit = ($395,200 + $17,000) $98.80
= 4,172 (rounded)