Question : 31. If sales revenue stays the same but the contribution margin : 1295595

 

 

31. If sales revenue stays the same but the contribution margin ratio decreases, then: A. net income will increase.B. fixed costs will decrease.C. net income will decrease.D. fixed costs will increase.

 

32. Which of the following statements is true when making decisions using cost-volume-profit (CVP) analysis? A. As long as the contribution margin is a positive number, net income will be positive.B. As long as variable costs are more than fixed costs, net income will be negative.C. As long as the contribution margin is greater than fixed costs, net income will be positive.D. As long as the sales price per unit is greater than fixed costs per unit, net income will be positive.

 

33. Haywood Inc. has the following information available for one of its products: 

 

Sales price per unit

$15

 

Contribution margin ratio

60%

 

Total fixed costs

$5,000

 

Units produced and sold

1,000

 

 

 

In Haywood sells one more unit, net income will: A. increase by $4.B. increase by $6.C. increase by $9.D. increase by $15.

 

34. Laverne’s Soda Shop wishes to decrease variable costs. Which of the following options should she consider? A. A decrease in advertising costs.B. A decrease in rent.C. A decrease in direct labor costs.D. An increase in equipment rentals.

 

35. Last year, Brown Manufacturing had a contribution margin ratio of 40%. This year, fixed expenses are expected to remain at $50,000 and sales are expected to increase by $90,000. What should the contribution margin ratio be this year if the company wishes to increase net income by $31,500? A. 78.75%B. 40.00%C. 35.00%D. 55.56%

 

36. Stealth Software Inc. has the following information available from last year for one of its software products: 

 

Sales revenue

$ 30,000

 

Variable costs

4,950

 

Fixed costs

  4,000

 

Net income

$ 21,050

 

 

 

Refer to the Stealth Software Inc. information above. If the software had a sales price of $30 per unit, what is the variable cost per unit? A. $165.00B. $      .20C. $  25.05D. $    4.95

 

37. Stealth Software Inc. has the following information available from last year for one of its software products: 

 

Sales revenue

$ 30,000

 

Variable costs

4,950

 

Fixed costs

  4,000

 

Net income

$ 21,050

 

 

 

Refer to the Stealth Software Inc. information above. If the software had a sales price of $30 per unit, what is the contribution margin per unit? A. $34.95B. $21.05C. $25.05D. can not be determined

 

38. Stealth Software Inc. has the following information available from last year for one of its software products: 

 

Sales revenue

$ 30,000

 

Variable costs

4,950

 

Fixed costs

  4,000

 

Net income

$ 21,050

 

 

 

Refer to the Stealth Software Inc. information above. If the sales price per unit is $30 and the company expects a 30% increase in sales volume this year along with a 20% decrease in fixed costs. What will be expected net income this year? A. $30,850B. $41,065C. $23,155D. $29,365

 

39. A company’s manager estimates that in the upcoming year, total variable costs will increase by $5,000 and total fixed costs will increase by $3,000. What will be the anticipated effect on net income? A. Net income will increase by $8,000.B. Net income will decrease by $8,000.C. Net income will increase by $2,000.D. Net income will decrease by $2,000.

 

40. A company’s manager estimates that in the upcoming year, total variable costs will increase by $20,000 and total fixed costs will decrease by $14,000. What will be the anticipated effect on net income? A. Net income will increase by $34,000.B. Net income will decrease by $34,000.C. Net income will increase by $6,000.D. Net income will decrease by $6,000.