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Question 15

DeNaples Company sells two products, A and B. Their contribution margins per unit are $8 and $6, respectively, and their sales mix is 1 unit of A to every 2 units of B. What is the breakeven point in units, assuming total fixed costs are $46,000?

Select one:

a. 2,300 units of A and 4,600 units of B.

b. 1,096 units of A and 2,190 units of B.

c. 1,500 units of A and 1,500 units of B.

d. 2,875 units of A and 3,833 units of B.

Question 16

Example Company currently has net earnings of $1,000 and a degree of operating leverage of 5, A 10% increase in sales should result in a

Select one:

a. 50% increase in net earnings.

b. 5% increase in net earnings.

c. $50 increase in net earnings.

d. $100 increase in net earnings.

Question 18

The following information is projected for product AA for the up-coming year:

Units	1,000	1,200
Sales ($24 per unit)	$24,000	$28,800
Variable Costs: ($14 per unit)	14,000	16,800
Fixed Costs	10,000	10,000
Net Earnings	$0	$2,000

What is the projected margin of safety for product AA at 1,200 units?

Select one:

a. $4,800.

b. $2,000

c. $2,800

d. $10,000

Question 19

Which one of the following is NOT a product cost?

Select one:

a. Fuel for the truck that delivers the product to the customer

b. Salary of the production supervisor

c. Factory maintenance costs

d. Depreciation on the factory equipment.

Question 20

According to GAAP, for external reporting, cost of goods sold should include

Select one:

a. All manufacturing costs.

b. Prime costs only.

c. Conversion costs only.

d. All costs, both period and product.

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