Question : 21. All else being equal, which of the following changes would : 1295594

 

 

21. All else being equal, which of the following changes would increase a company’s net income? A. An increase in fixed costs.B. A decrease in contribution margin.C. An increase in variable costs.D. A decrease in fixed costs.

 

22. Hunter Inc. sells a unique product with the following information available: 

 

Sales price

$85 per unit

 

Variable costs

$25 per unit

 

Fixed Costs

$10,000

 

Units produced and sold

    1,250

 

 

 

Refer to Hunter Inc. information above. If one more unit is sold, net income will: A. decrease by $33.B. increase by $52.C. increase by $60.D. decrease by $8.

 

23. Hunter Inc. sells a unique product with the following information available: 

 

Sales price

$85 per unit

 

Variable costs

$25 per unit

 

Fixed Costs

$10,000

 

Units produced and sold

    1,250

 

 

 

Refer to Hunter Inc. information above. What is the contribution margin ratio? A. 41.67%B.   2.40%C. 70.59%D. 61.18%

 

24. Carolina Products sells a unique item with the following information available: 

 

Sales price

$40 per unit

 

Variable costs

$12 per unit

 

Fixed Costs

$  2 per unit

 

Units produced and sold

2,000

 

 

 

Refer to the Carolina Products information above. If one more unit is sold, net income will: A. increase by $28.B. increase by $26.C. increase by $40.D. increase by $38.

 

25. Carolina Products sells a unique item with the following information available: 

 

Sales price

$40 per unit

 

Variable costs

$12 per unit

 

Fixed Costs

$  2 per unit

 

Units produced and sold

2,000

 

 

 

Refer to the Carolina Products information above. What is the contribution margin per unit? A. $26B. $38C. $52D. $28

 

26. Carolina Products sells a unique item with the following information available: 

 

Sales price

$40 per unit

 

Variable costs

$12 per unit

 

Fixed Costs

$  2 per unit

 

Units produced and sold

2,000

 

 

 

Refer to the Carolina Products information above. What is the contribution margin ratio? A. 30%B. 70%C. 65%D. 35%

 

27. Joe’s Coffee House has the following information available for the month of July: 

 

Sales (2,500 cups)

$  7,500

 

Variable costs

3,250

 

Fixed costs

  4,000

 

Net Income

$    250

 

 

 

Refer to the Joe’s Coffee House information above. If Joe’s sells 500 more cups of coffee per month, net income will: A. increase by $850.B. increase by $100.C. increase by $150.D. increase by $1,500.

 

28. Joe’s Coffee House has the following information available for the month of July: 

 

Sales (2,500 cups)

$  7,500

 

Variable costs

3,250

 

Fixed costs

  4,000

 

Net Income

$    250

 

 

 

Refer to the Joe’s Coffee House information above. Each additional cup of coffee sold will increase net income by: A. $1.70B. $3.00C. $1.00D. $  .57

 

29. Joe’s Coffee House has the following information available for the month of July: 

 

Sales (2,500 cups)

$  7,500

 

Variable costs

3,250

 

Fixed costs

  4,000

 

Net Income

$    250

 

 

 

Refer to the Joe’s Coffee House information above. All else being equal, if Joe’s increases the sales price per unit by 10%, net income will: A. increase by $425.B. increase by $750.C. increase by $75.D. not change.

 

30. Jazz Products has the following information available for the month of March: 

 

Sales (4,000 units)

$  40,000

 

Variable costs

18,000

 

Fixed costs

  5,000

 

Net income

$  17,000

 

 

 

The company’s manager is considering several options to increase net income. By what amount do sales dollars need to increase in order for net income to increase to $25,000? A. $14,545B. $25,000C. $  3,000D. $18,820