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Q1) K-Henry's Dull Diner has contribution margin ratio of 16%.  If fixed costs are $176,800, how many dollars of revenue should K-Henry's generate in order to reach break-even point?

 

a) $282,880

 

b) $1,060,800

 

c) $208,476

 

d) $1,105,000

 

Q2) Company has total cost of $50.00 per unit at volume of 100,000 units.  Variable cost per unit is $20.00.  What would price be if company expected volume of 120,000 units and used a mark-up of 50%?

 

a) $75.00

 

b) $62.50

 

c) There is not sufficient information in problem to answer

 

d) $67.50

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