# Chpter 6

Pages: 2 (288 words) Published: August 5, 2012

1. Chase Company has provided the following data:
|Sales price |\$200 per unit |
|Sales |6,000 units |
|Fixed cost |\$300,000 |
|Variable cost |\$100 per unit |

If the dollar contribution margin per unit is increased by \$10, total fixed cost is decreased by 60,000, and all other factors remain the same, net income will: A) Decrease by \$60,000

B) Increase by \$60,000
C) Increase by \$120,000

D) Increase by \$140,000

2. Curtin Company sells a single product. The product has a selling price of \$50 per unit and variable expenses of 80% of sales. If the company's fixed expenses total \$150,000 per year, then it will have a break-even of:

A) \$750,000

B) \$187,500

C) \$15,000

D) \$3,750

3. The following is Aykroyd Corporation's contribution format income statement for last month: |Sales |\$4,000,000 |
|Less variable expenses | 2,800,000 |
|Contribution margin |1,200,000 |
|Less fixed expenses |    720,000 |
|Net income |\$  480,000 |

The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. What is the company's margin of safety in dollars?

A) \$480,000

B) \$1,600,000

C) \$2,400,000

D) \$3,520,000

4. Using the same information above for Aykroyd Corporation, how many units would the company have to sell to attain target profits of \$600,000?

A) 88,000

B) 100,000

C) 106,668

D) 150,000

5. Using the same information in number 3 above for Aykroyd Corporation, if sales increase by 400 units, how much should net income increase?

A) \$1,600

B) \$6,000...