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
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