Home / Questions / Refer to Acme Company How many units must Acme sell to earn a profit of $40,000
Refer to Acme Company. How many units must Acme sell to earn a profit of $40,000?
a.2,000
b.8,500
c.20,000
d.22,000
52.What formula is used to calculate the sales dollars needed to earn a desired profit?
a.(fixed costs + contribution margin)/(1 ? variable cost ratio)
b.(fixed costs + desired profit)/(1 ? variable cost ratio)
c.(fixed costs + variable costs)/(1 ? variable cost ratio)
d.(fixed costs + desired profit)/(1 ? sales ratio)
53.What is the ratio of fixed expenses to the contribution margin ratio?
a.the break-even point in sales
b.the break-even point in units
c.the variable cost ratio
d.the margin of safety
54.Assume the following information:
Variable cost ratio80%
Total fixed costs$60,000
What volume of sales dollars is needed to break even?
a.$12,000
b.$48,000
c.$75,000
d.$300,000
55.Baker Company sells its product for $60. It has a variable cost ratio of 40% and total fixed costs of $9,000. What is the break-even point in sales dollars?
a.$3,600
b.$5,400
c.$9,000
d.$15,000
56.Rebecca Inc. sells only one product at a regular price of $7.50 per unit. Variable expenses are 60% of sales, and fixed expenses are $30,000. Management has decided to decrease the selling price to $6.00 in hopes of increasing its volume of sales. How many sales (in dollars) were required to break even at the old price of $7.50 per unit?
a.$12,000
b.$18,000
c.$50,000
d.$75,000
57.Patricia Company produces two products, X and Y, which account for 60% and 40%, respectively, of total sales dollars. Contribution margin ratios are 50% for X and 25% for Y. Total fixed costs are $120,000. What is Patricia’s break-even point in sales dollars?
a.$300,000
b.$328,767
c.$342,856
d.$375,000
58.Information about the Harmon Company’s two products is as follows:
Product XProduct Y
Unit selling price$9.00$9.00
Unit variable costs:
Manufacturing$5.25$6.75
Selling.75.75
Total$6.00$7.50
Monthly fixed costs are as follows:
Manufacturing$ 82,500
Selling and administrative 45,000
Total$127,500
Suppose the sales mix in units is 70% Product X and 30% Product Y. What is the total monthly sales volume in units required to break even?
a.8,333 units
b.16,667 units
c.50,000 units
d.56,667 units
Yerke Company makes children’s jungle gyms and tree houses. The price of jungle gyms is $120, and its variable expenses are $90 per unit. The price of tree houses is $200, and its variable expenses are $100. Total fixed expenses are $253,750. Last year, Yerke sold 12,000 gyms and 4,000 tree houses.
59.Refer to Yerke Company. Yerke expects tree house demand to increase from 4,000 to 8,000 units. What is the sales revenue at break-even?
a.$140,000
b.$253,700
c.$411,250
d.$665,000
60.Refer to Yerke Company. Yerke expects tree house demand to increase from 4,000 to 8,000 units per year. What is the new contribution margin ratio?
a.38%
b.40%
c.50%
d.60%
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