29 Jun Question MULTIPLE CHOICE QUESTIONS Use the following to answer questions 31-32:
Question
MULTIPLE CHOICE QUESTIONS
Use the following to answer questions 31-32:
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31. Line A is the:
A. fixed cost line.
B. variable cost line.
C. total cost line.
D. total revenue line.
E. profit line.
32. The triangular area between the horizontal axis and Line A, to the right of 4,000, represents:
A. fixed cost.
B. variable cost.
C. profit.
D. loss.
E. sales revenue.
33. A recent income statement of Oslo Corporation reported the following data:
Units sold
8,000
Sales revenue
$7,200,000
Variable costs
4,000,000
Fixed costs
1,600,000
If the company desired to earn a target net profit of $480,000, it would have to sell:
A. 1,200 units.
B. 2,800 units.
C. 4,000 units.
D. 5,200 units.
E. an amount other than those above.
34. Yellow, Inc., sells a single product for $10. Variable costs are $4 per unit and fixed costs total $120,000 at a volume level of 10,000 units. What dollar sales level would Yellow have to achieve to earn a target net profit of $240,000?
A. $400,000.
B. $500,000.
C. $600,000.
D. $750,000.
E. $900,000.
Use the following to answer questions 35-37:
Archie sells a single product for $50. Variable costs are 60% of the selling price, and the company has fixed costs that amount to $400,000. Current sales total 16,000 units.
35. Archie:
A. will break-even by selling 8,000 units.
B. will break-even by selling 13,333 units.
C. will break-even by selling 20,000 units.
D. will break-even by selling 1,000,000 units.
E. cannot break-even because it loses money on every unit sold.
36. Each unit that the company sells will:
A. increase overall profitability by $20.
B. increase overall profitability by $30.
C. increase overall profitability by $50.
D. increase overall profitability by some other amount.
E. decrease overall profitability by $5.
37. In order to produce a target profit of $22,000, Archie’s dollar sales must total:
A. $8,440.
B. $21,100.
C. $1,000,000.
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