Question

mo 1. Which two terms below desch w terms below describe the warmid to security guards that monitor a factory 24 hours a day i de A. variable cost and direct cost B fixed cost and direct cos Variable cost and indirect cost Dfixed cost and indirect cost 2. Which of the following is an assumption that is NOT made in most cost-volume-profit calculations A. Selling price, Variable expense per unit, and fixed expense per unit do not change throughout the relevant range. B. There is no change in inventory levels. X C. In a multiproduct company, the sales mix does not change. D. The selling price is constant. X 0,000 FE 3,040 СМ 3. Benton Corporation has gathered the following information for the year ended December 31, 2002. There were no beginning or ending inventories. The company produced and sold 10,000 units. variante !! Sales 5770 Direct materials used 5,160 25 Direct labor Fixed costs: Factory overhead 2.58 2,480 Selling expenses 1,520 5770 Administrative expenses 1,720 Other Variable costs: Factory overhead 1,560 Selling expenses 1,720 Administrative expenses 920 79200 12217) 0.42 2.58 What was the break even point (in units) for the last year? A. 3,250 СМ B. 3,000 C. 2,250 D. 2,000 E. None of the above unit a what = unit an o- 5720 2.58 - STWO R: 2217

Answer 1

1)	Correct Option: D
	Fixed cost and indirect cost.
	wages paid to a factory security guard is a fixed cost and which are not directly related to production per unit.
2)	The correct option is A
	Because fixed cost per unit changes with the scale of operation.
3)	Selling price per unit	$           3.00
	($30000/10000)
	Less:
	Direct Material	$           0.52
	($5160/10000)
	Direct Labor	$           0.30
	($3040/10000)
	Variable expenses	$           0.42
	($4200/10000)
	Contribution margin per unit	$           1.76
	Fixed cost =$5720	$         5,720
	Break-even Point In Unit = Fixed Cost/ Contribution Margin Per Unit
	= $5720/1.76
	=3250 units
	Correct Option: A
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