Question : Objective 3.7 Answer the following questions using the information below: The following : 1217159

 

Objective 3.7

 

Answer the following questions using the information below:

 

The following information is for Barnett Corporation:

 

Product X: Revenue$10.00

Variable Cost$2.50

 

Product Y: Revenue$15.00

Variable Cost$5.00

 

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) 1,013 units of Y and 2,025 units of X

C) 2,013 units of Y and 4,025 units of X

D) 2,000 units of Y and 4,000 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) $1,200,000

B) $1,250,000

C) $1,750,000

D) None of these answers are correct.

 

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) be indeterminable

 

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) be indeterminable

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, 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) $75,000

D) None of these answers are correct.

 

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) be indeterminable

 

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) be indeterminable

9) Assuming a constant mix of 3 units of Small for every 1 unit of Large.

SmallLargeTotal

Sales$20$30

VC1418

Total fixed costs$48,000

 

The breakeven point in units would be:

A) 4,800 units of Small and 1,600 units of Large

B) 1,200 units of Small and 400 units of Large

C) 1,600 units of Small and 4,800 units of Large

D) 400 units of Small and 1,200 units of Large

 

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

A) total revenues will increase

B) breakeven quantity will decrease

C) total contribution margin will increase

D) operating income will decrease

 

 

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