Question : Objective 3.7 Answer the following questions using the information below: The following : 1212045

 

Objective 3.7

 

Answer the following questions using the information below:

 

The following information is for Alex Corp:

 

Product X: Revenue$15.00

Variable Cost$2.50

 

Product Y: Revenue$25.00

Variable Cost$10.00

 

Total fixed costs$50,000

 

1) What is the breakeven point assuming the sales mix consists of two units of Product X and one unit of Product Y?

A) 1,000 units of Y and 2,000 units of X

B) 1,113 units of Y and 2,025 units of X

C) 2,313 units of Y and 4,025 units of X

D) 1,250 units of Y and 2,500 units of X

2) What is the operating income, assuming actual sales total 150,000 units, and the sales mix is two units of Product X and one unit of Product Y?

A) $1,950,000

B) $1,850,000

C) $1,750,000

D) $2,150,000

 

3) ) If the sales mix shifts to one unit of Product X and two units of Product Y, then the weighted-average contribution margin will ________.

A) increase per unit

B) stay the same

C) decrease per unit

D) decrease by $0.50 per unit

 

4) If the sales mix shifts to one unit of Product X and two units of Product Y, then the breakeven point will ________.

A) increase

B) stay the same

C) decrease

D) will be greater than the original breakeven point

Answer the following questions using the information below:

 

The following information is for the Jeffries Corporation:

 

Product A: Revenue$16.00

Variable Cost$12.00

 

Product B: Revenue$24.00

Variable Cost$16.00

 

Total fixed costs$75,000

 

5) What is the breakeven point, assuming the sales mix consists of three units of Product A and one unit of Product B?

A) 10,000 units of A and 5,000 units of B

B) 11,250 units of A and 3,750 units of B

C) 12,000 units of A and 4,000 units of B

D) 4,000 units of A and 12,000 units of B

 

6) What is the operating income of Jeffries Corporation, assuming actual sales total 25,000 units, and the sales mix is three units of Product A and one unit of Product B?

A) $50,000

B) $60,000

C) $77,000

D) $66,000

7) If the sales mix shifts to four units of Product A and one unit of Product B, then the weighted-average contribution margin will ________.

A) increase per unit

B) stay the same

C) decrease per unit

D) either increase or stay the same

 

8) If the sales mix shifts to four units of Product A and one unit of Product B, then the breakeven point will ________.

A) increase

B) stay the same

C) decrease

D) either decrease or remain same

 

9) Assuming a constant mix of 3 units of X for every 1 unit of Y.

 

XYTotal

Sales$25$40

VC1822

Total fixed costs$78,000

 

The breakeven point in units would be ________.

A) 6,000 units of X and 2,000 units of Y

B) 12,000 units of X and 4,000 units of Y

C) 5,200 units of X and 1,800 units of Y

D) 3,600 units of X and 1,200 units of Y

10) In multiproduct situations, when sales mix shifts toward the product with the lowest contribution margin then ________.

A) total revenues will increase

B) interest cost will decrease

C) total contribution margin will increase

D) operating income will decrease

 

 

 

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