Dybala Corporation produces and sells a single product. Data concerning that product appear below:
| |
Per Unit |
|
Percent of Sales |
| Selling price |
$ |
120 |
|
|
|
100 |
% |
| Variable expenses |
|
84 |
|
|
|
70 |
% |
| Contribution margin |
|
36 |
|
|
|
30 |
% |
The company is currently selling 5,500 units per month. Fixed expenses are $120,000 per month. The marketing manager believes that a $7,600 increase in the monthly advertising budget would result in a 360 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?
increase of $5,360
decrease of $7,600
increase of $12,960
decrease of $5,360
Carlton Corporation sells a single product at a selling price of $63 per unit. Variable expenses are $41 per unit and fixed expenses are $99,220. Carlton's break-even point is:
4,510 units
2,420 units
4,719 units
1,575 units
Lore Corporation has provided the following information:
| |
|
|
|
| Sales |
$ |
360,000 |
|
| Variable expenses |
$ |
72,000 |
|
| Fixed expenses |
$ |
11,280 |
|
Lore's break-even point in dollar sales is:
$83,280
$11,280
$14,100
$72,000
Under absorption costing, product costs include:
| |
Variable manufacturing overhead |
Fixed manufacturing overhead |
| A) |
Yes |
Yes |
| B) |
No |
No |
| C) |
Yes |
No |
| D) |
No |
Yes |
|
|
Option A Option B Option C Option D
The term gross margin is used in reports prepared using:
both absorption costing and variable costing.
absorption costing but not variable costing.
variable costing but not absorption costing.
neither variable costing nor absorption costing.