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
Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.
You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.
Read moreEach paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.
Read moreThanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.
Read moreYour email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.
Read moreBy sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.
Read more