Question

QUESTION 34 Drake Company's income statement for the most recent year appears below: Sales (26,000 units) $650,000 442,000 208,000 234,000 $(26,000) Contribution margin Net operating loss Drake's unit contribution margin is O 1. $17 O 3. $1 QUESTION 31 Rovinsky Corporation, a company that produces and sells a single product, has provided its contribution format income statement for November Sales (5,700 units Variable expenses. Contribution margin Fixed expense Net operating income $319,200 188,100 131,100 106,500 $24600 If the company sells 5,300 units instead of 5,700, its net operating income would then amount to O 1. $24,600 2. $2,200 3. $22,874 4. $15,400 QUESTION 22 The sales volume in units that are needed to achieve a specific Target Profit can be calculated by: Dividing the dollars of fixed costs by the unit contribution margin Dividing the dollars of fixed costs and target profit by the unit contribution margin Dividing the dollars of target profit by the unit contribution margin Dividing the dollars of target profit by the sales price QUESTION 20 Once the break-even point has been reached, net operating income will increase by the unit contribution margin for each additional unit sold O True O False

Answer 1

56 34) 57 58 59 60 61 62 63 64 Drake's Unit Contribution Margin Contribution Margin Number of Units - 26000 Drake's Unit Contribution Margin - Answer 2) $8 121900 (131100/5700 *5300) 106500 67 31) Contribution Margin for 5300 Units Less Fixed Expenses Net Operating Income 69 70 71 72 73 74 75 76 77 22) 78 79 20) 80 15400 As thre is no change in per unit sale price and variable expenses therefore the per unit contribution margin will also remain same. Fixed expenses will also remain same Answer 4) $15,400 Answer 2) Dividing the dollars of fixed osts and target profit by the unit contribution margin. TRUE