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Question: 82 dundas inc manufactures a single product the product sells...

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82. Dundas Inc. manufactures a single product. The product sells for $10. The variable manufacturing cost per unit is $2 and the variable selling cost is $2 per unit. Dundas incurs monthly fixed costs of $100,000 for manufacturing and $140,000 for administration and selling If Dundas raises its selling price by 10% in response to a 10% increase in variable costs, and income taxes are 40%, its new breakeven point in sales dollars (relative to that of the original data above) will be: a) Higher b) Unchanged c) Lower d) Cannot be determined Answer: b Difficulty: Medium Learning Objective: Apply CVP calculations for a single product. CPA: Management Accounting 83. The breakeven point for a service organization will decrease if a) The variable cost ratio increases b) The mix of less profitable services increases c) The contribution margin ratio increases d) Fixed costs increase Answer: c Difficulty: Easy Learning Objective: Apply CVP calculations for a single product. 84. The breakeven point for a service organization will decrease if a) Volume increases b) The variable cost ratio decreases c) Fixed costs increase d) The contribution margin ratio decreases Answer: b Difficulty: Easy Learning Objective: Apply CVP calculations for a single
93. Austin Co. sells three products and incurs $18,000 per period in fixed costs. The three products have the following Product Price $20 3 units 20 49 24 12 How many units of Product P will be sold at the breakeven a) 40 b) 360 c) 120 d) 200 Answer:c Difficulty: Medium Learning Objective: Apply CVP calculations for multiple CPA: Management Accounting 94. Ferguson Co. incurs $568,000 in fixed costs while producing three products with the following characteristics: Sales Mix Unit Product (Units) $900 600 400 2 What is the selling price of Product T? a) $1,200 b) $1.143 c) $2,000 d) $1,500 Answer: C Difficulty: Easy Learning Objective: Apply CVP calculations for multiple CPA: Management Accounting
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