MAJOR CHAPTER CONCEPTS 1-6

This should include most of topics discusses, but I am not promising it is an all-inclusive list.

Chapters 1 & 2:
• DM, DL, OH
• Product v. Period Costs
• COGM Schedule *memorize*
• Inventoriable costs
• 3 types of inventory – RM, WIP, FG
• Variable costs v. Fixed costs
• Direct v. Indirect costs

Chapter 3:
• Process v. Job Order Costing
• Applying Manufacturing OH – 3 methods, know which accounts to use (WIP, FG, COGS)
• Over-applied vs. Under-applied
• Predetermined OH rate
• Journal entries

Chapter 5:
• Two types of FC: committed and discretionary
• Relevant range
• Mixed costs
• High-Low method
• TC = VC + FC
• Two types of income statement: traditional and CM approach

Chapter 6:
• Break-even calculation
• CM Ratio
• How to calculate profit
• How to change things and still find new BE point
• Margin of Safety

1
Chapter 1

1. Which of the following statements are FALSE?

I. Managerial accountants would normally prepare the yearly financial report that would be issued to
stockholders.
II. Financial accounting is more important to an organization than managerial accounting.
III. Managerial accounting is governed by the generally accepted accounting principles.

A. I only
B. II only
C. I and II
D. I, II, and III
E. None are false

2. Managerial accounting:
A. Primarily involves recording the financial history of an organization.
B. Is governed by generally accepted accounting principles.
C. Involves providing information primarily to external users.
D. Involves providing information primarily to internal users
E. Is both B and C above.

3. Managerial accounting:
A. Is a required for all companies
B. Focuses more on timeliness than precision
C. Is oriented more towards past information
D. Is meant to be distributed to external parties

4. Which of the following is NOT one of the functions of managers?

A. Planning
B. Motivating
C. Evaluating
D. Decision-Making
E. All of the above are functions of managers

5. Which of the following would most likely use managerial accounting information?
a. SEC
b. Employees
c. Investors
d. Creditors

6. Which of the following would most likely use financial accounting information?
a. Creditors
b. Chief Executive Officer
c. Management
d. Chief Financial Officer

7. Which of the following are functions of management?

a. Planning
b. Directing and Motivating
c. Controlling
d. All of the above

2
8. Which of the following is not a benefit of a JIT system?
a. Reduced Inventory Cost
b. Tied-up funds
c. Increased throughput
d. High quality products
e. All of the above are benefits

Chapter 2

9. You have just graduated and have accepted a Cost Analyst position on the accounting staff at Littman
Manufacturing Corporation. You spend part of your time analyzing factory costs and the rest of your time analyzing
marketing expenditures. You are paid $40,000 per year. You salary would be classified as:
a. part product cost and part period cost
b. part product and part selling cost
c. all product cost
d. all period cost

10. Cardboard used in the manufacture of boxes would be a:

Conversion Cost Direct Cost Overhead Cost Selling Cost
a. No Yes No No
b. Yes Yes No No
c. Yes No Yes No
d. Yes Yes No Yes
e. No No No Yes

11. The following costs relate to Isaiah Industries for last quarter:
Conversion cost $435,000
Direct materials used $215,000
Factory overhead $190,000
Selling and Administrative expense $185,000

What is Isaiah’s prime cost for the last quarter?

a. $460,000
b. $410,000
c. $405,000
d. $375,000
e. None of the above are correct

12. Which of the following statements about the relevant range is false?
a. Fixed cost per unit remains constant.
b. Variable costs change in direct proportion to changes in activity.
c. Total fixed costs remain constant.
d. Mixed costs contain both fixed and variable components.

Use the following information to answer questions 13 and 14:

Direct materials used $180,000

Factory taxes 4,500
Factory depreciation 27,000
Factory maintenance supervisor salary 37,500
Sales commissions 30,000
Indirect labor (wages) 7,500
Administrative salaries 60,000
Direct labor 300,000

3
13. Total prime costs are
a. $480,000
b. $570,000
c. $476,500
d. $300,000

14. Total variable costs are

a. $480,000
b. $117,000
c. $517,500
d. $300,000

15. A wooden leg used in a chair manufacturing business would be considered

a. direct labor
b. manufacturing overhead
c. direct materials
d. fixed expense

16. The glue used in a chair manufacturing business would be considered

a. direct labor
b. manufacturing overhead
c. direct materials
d. fixed expense

The next two questions use the following information:

S & M Incorporated had the following data for the month of October, 20X4:
Inventories Beginning Balance Ending Balance
Raw materials $12,000 $ ?
Work in process 15,000 8,000
Finished goods ? 16,000

Additional Data:
Sales revenue $120,000
Direct labor costs 10,000
Manufacturing overhead costs 15,000
Selling expenses 16,000
Administrative expenses 14,000

17. If the cost of raw materials purchased in October was $11,000 and the cost of goods manufactured was
$35,000, then the inventory of raw materials on October 31 was:
a. $26,000
b. $18,000
c. $20,000
d. $25,000

18. If the cost of goods manufactured for October was $26,000 and net income was $45,000, then the finished
goods inventory on October 1 was:
a. $36,000
b. $27,000
c. $35,000
d. $29,000

4
19. Herb Smedley, chief accountant at Weasel Paper Works, has computed total manufacturing cost to be $42,000
for the period. The beginning and ending inventory balances in the three inventory accounts are as shown below:
Beginning Ending
Raw (direct) materials …….. $2,000 $5,000
Work in progress ………….. 11,000 9,000
Finished goods ……………. 18,000 12,000

What is the cost of goods manufactured (finished) for the period?

A. $36,000
B. $39,000
C. $40,000
D. $44,000
E. $48,000

Use the following information for questions 20-22:

Product advertising ………………………… $20,000

Fire insurance premium for factory……….... 5,000
Electricity, sales offices…………………….. 2,000
Lubricating oil for sewing machines……….. 4,000
Foam cushions used in production…………. 32,000
Assembly line workers’ wages……………... 46,000
Rent, factory building………………………. 10,000
Freight-out………………………………….. 6,000
Salary, company president…………………. 25,000
Property taxes, corporate headquarters…….. 3,000
Total ……………………………….. $153,000

20. What dollar amount of these costs would be considered manufacturing (production) overhead?
A. $19,000
B. $45,000
C. $51,000
D. $97,000
E. None of the above

21. What dollar amount of these costs would be considered period costs?
A. $30,000
B. $45,000
C. $56,000
D. $97,000
E. None of the above

22. What dollar amount of these would be considered product costs?

A. $56,000
B. $97,000
C. $103,000
D. $153,000
E. None of the above

23. A sunk cost is:

A. A cost that is relevant in making
B. A past cost
C. A cost that cannot be avoided
D. Both B and C above
E. All of the above

5
Chapter 3

24. The following three examples briefly describe the manufacture of three different products. Which costing
method (job-order or process) would be the best method to use for each product?
I. Fred Puetz manufactures Fred’s Wine Cooler. Fred once made the statement, “People can have any flavor
of Fred’s Wine Cooler they want as long as its boysenberry.”
II. Ahmad Aerodonetics is manufacturing three space shuttles for the country of Kricherra. Each shuttle is
slightly different and production will last approximately two years.
III. Nikki’s Masterpieces, Inc. manufactures evening gowns. Each gown is tailor-made to fit each customer’s
specifications.

I II III _
A. Process Process Job-order
B. Job-order Job-order Process
C. Job-order Job-order Job-order
D. Process Job-order Process
E. Process Job-order Job-order

25. Sensual scents, Inc. uses a job-order cost system with machine hours as the overhead base. At the beginning of
last year, Sensual estimated 38,000 machine hours and $152,000 of manufacturing overhead costs. For the year,
only 37,500 hours were logged, but $153,500 of manufacturing overhead cost was incurred. What is Sensual’s
under or over-applied (absorbed) manufacturing overhead?
A. $1,500 under-applied
B. $1,500 over-applied
C. $2,000 under-applied
D. $2,000 over-applied
E. $3,500 under-applied

26. Which of the following statements are FALSE?

I. A manufacturing company can use direct labor hours as an overhead base in one department and machine
hours as an overhead base in another.
II. A debit balance in the work in process account indicates that not all goods completed during the period
were sold.
III. The predetermined overhead rate is computed by dividing budgeted or estimated units in the overhead base
by budgeted or estimated manufacturing overhead costs.

A. I only
B. II only
C. I and II only
D. II and III only
E. I, II, and III

6
Use the following information below for questions 27-30:

Vera Whisbey and Herman Coutts both work as night security guards at Beeley Manufacturing. Vera and Herman
were bored one night so they decided to have a contest to see who could throw a paper airplein the farthest. Vera
won this competition hands down. This crushed Herman’s ego so he decided to change the contest to who could
throw a flaming paper airplane the farthest. The winner of this contest was never declared because the first flight
put corporate headquarters ablaze.

Beeley uses a job-order cost system and your job is to try to piece together last year’s data from the burnt remains.
The following information was all that was saved from the fiery paper airplane crash:

Finished goods inventory, 12/31 ………………………. $8,100

Predetermined OH rate ………………………………… $1.40 per Direct Labor Hour
Work in Process Inventory, 1/1..……………………….. $2,400
Direct materials inventory, 12/31 ……………………… $9,300
Direct materials inventory, 1/1…………………………. $1,600
Cost of Goods Manufactured …………………………... $88,200
Estimated DLH* for the year …………………………... 12,320 hrs.
Actual DLH* for the year ………………………………. 11,200 hrs.
Finished Goods Inventory, 1/1…………………………. $14,600
Work in Process Inventory, 12/31……………………… $6,900
Direct Materials Assigned to production
For the year………………………………………$31,100
Overapplied (absorbed) manufacturing
Overhead………………………………………….$1,400
*DLH = Direct Labor Hours

27. What was the actual manufacturing overhead cost incurred at Beeley last year?
A. $7,400
B. $14,280
C. $15,680
D. $17,080
E. None of the above

28. What was Beeley expecting manufacturing overhead cost to be last year?
A. $8,800
B. $14,280
C. $17,080
D. $17,248
E. None of the above

29. How much direct labor cost was assigned to production at Beeley last year?
A. $36,920
B. $44,352
C. $45,920
D. $47,320
E. None of the above

30. What was Beeley’s cost of goods sold for last year before any adjustment for overapplied overhead?
A. $81,700
B. $83,700
C. $92,700
D. Cannot be determined
E. None of the above

7
Chapter 5 & 6

31. Paine Company wishes to determine the fixed portion of its electrical costs (a mixed cost). Management
believes that the variable portion of the electrical costs is driven by machine-hours. Information for the previous
three months follows:

Machine-hours Electrical Cost

January 33,000 $600
February 31,000 $585
March 34,000 $610

Using the High-Low method, the fixed portion of the company’s electrical costs would be estimated to be closest to:

A. $283
B. $327
C. $375
D. $408

Use the following to answer questions 32-35:

An income statement for Sam’s Bookstore for the first quarter of the year is presented below:

Sam’s Bookstore
Income Statement
For the Quarter Ended March 31

Sales $900,000
Cost of Goods Sold 630,000
Gross Margin 270,000
Less Operatin Expenses
Selling $100,000
Administration 104,000 204,000
Net Operating Income $66,000

On average, a book sells for $50. Variable selling expenses are $5 per book with the remaining selling expenses
being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed.

32. The contribution margin for Sam’s Bookstore for the first quarter is:
A. $180,000
B. $774,000
C. $144,000
D. $756,000

33. The net operating income using the contribution approach for the first quarter is:
A. $270,000
B. $180,000
C. $144,000
D. $66,000

34. The cost formula for operating expenses with “x” equal to the number of books sold is:
A. Y = $102,000 + $5x
B. Y = $102,000 + $7x
C. Y = $78,000 + $7x

8
 D. Y = $78,000 + $9x
35. If 20,000 books are sold during the second quarter and this activity is within the relevant range, the company’s
expected contribution margin would be:
A. $300,000
B. $160,000
C. $860,000
D. $58,000

36. Contribution margin is the amount remaining after:

A. Variable expenses have been deducted from sales revenue.
B. Fixed expenses have been deducted from sales revenue
C. Fixed expenses have been deducted from variable expenses
D. Cost of goods sold has been deducted from sales revenues

37. Yang company reported 250,000 dollars in depreciation for plant facilities. This is an example of a:
A. Discretionary Fixed Cost
B. Committed Fixed Cost
C. Variable Cost
D. Mixed Cost

38. Shallow Pool Inc. has incurred the following shipping costs over the past 6 months:
Units Sold Shipping Cost

January 6,000 $66,000

February 5,000 $65,000
March 7,000 $70,000
April 9,000 $80,000
May 8,000 $76,000
June 12,000 $100,000

Using the high-low method, the fixed portion of the company’s electrical costs would be estimated to be
closest to:
A. $10,000
B. $35,000
C. $40,000
D. $72,000

39. Which of the following statements are FALSE?

I. A variable cost will increase in total as the level of activity increases.
II. A mixed (semivariable) cost will increase per unit as the level of activity increases.
III. A fixed cost will remain constant per unit over all activity levels within the relevant range.

A. I only
B. II only
C. II and III
D. I, II, and III

9
40. Hagler’s Toupees has the following machine hours and production costs for the last six months of last year:
Month Machine Hours Production Cost
July 15,000 $12,075
August 13,500 $10,800
September 11,500 $ 9,580
October 15,500 $12,080
November 14,800 $11,692
December 12,100 $9,922

If Hagler expects to incur 14,000 machine hours in January, what will be the total production cost estimate using the
high-low method?
A. $8,750.00
B. $11,142.50
C. $22,400.00
D. $31,220.00
E. None of the above

Use the information below for questions 41 and 42.

Wally and Beaver Cleavor were in need of some money so they decided to have an Eddie Haskal look-a-like
contest. Each contestant would be charged $10 for entry into the contest and the winner would receive $100.
Beaver just finished his first course in managerial accounting, so he decided to compute the profit on this venture.
Beaver figured out the results and went running to tell Wally. “Gee Wally,” said Beaver, “if we get 80 contestants,
we will have a contribution margin of $620 and a net income of $360!” “Wow Beav,” Wally replied, “we’re
making all that money off dumb ‘ol Eddie Haskal.”

41. What is the cost formula for Wally and Beaver’s venture?
A. Y = $260 + 2.25x
B. Y = $260 + 180x
C. Y = $260 + 3.25x
D. Y = $260 + 260x
E. None of the above

42. What will be the effect on the following items if Wally and Beaver raise the prize money from $100 up to $300?
Variable Cost Fixed Cost Cont. Margin
A. Increase No change No change
B. No change Increase No change
C. No change Increase Decrease
D. Decrease No change Increase
E. None

43. Willard Clifton is a dentist in Minerva, New York. Willard still only charges $20 per patient visit. Willard had
his accountant prepare a cost formula for his practice based on the number of patient visits. The cost formula is:

Y = $232 + 13.10x

Willard had 160 patient visits last year. If Willard’s business increases 10% this year, what will be the total increase
in contribution margin?
A. $320.00
B. $209.60

10
 C. $110.40
D. $88.00
E. None of the above

44. Red Company wishes to determine the fixed portion of its electrical costs (a mixed cost). Management believes
that the variable portion of the electrical cost is driven by machine hours. Information for the previous three months
is as follows:

Machine hours Electrical cost

January 33,000 $600
February 31,000 $585
March 34,000 $610

A. Using the high-low method, what is the estimated variable cost per machine hour?
B. What is the estimated fixed electrical cost?
C. What is the cost formula for the total electrical cost?

45. ABC Corporation’s projected profit for the coming year is as follows:
Total Per Unit
Sales $200,000 $20
Less: Variable Expenses $120,000 $12
Contribution Margin $80,000 $8
Less: Fixes Expenses $64,000
Operating Income $16,000

A. Compute the break-even point in units.

B. Compute the contribution margin ratio.
C. Compute the break-even point in sales dollars using the contribution margin ratio.
D. How many units must be sold to earn a profit of $30,000?
E. Compute the additional profit that ABC would earn if sales were $25,000 more than expected.
F. For the projected level of sales, compute the margin of safety in dollars and units.

46.Blue Co. had the following income statement in February:

Sales $150,000
Costs 170,000
Loss ($20,000)

The firm’s contribution margin ratio at its current selling price of $20 per unit is 40%.

A. What is the firm’s break-even point in sales dollars?

B. What is the firm’s break-even point in units?
C. What are the total costs if it sells 8,000 units?

11
Use the following information for questions 47 through 49.

Acme, Inc. manufactures Prince moustache pencils which sell for $7.50 each. Acme expects to sell 82,000 Prince
pencils next quarter. At this level of sales, variable expenses will total $184,500 and fixed expenses will total
$242,130.

47. How many pencils will Acme have to sell next quarter to break even?

A. 32,284 pencils
B. 46,120 pencils
C. 56,884 pencils
D. None of the above

48. If Acme wants to make $160,125 in profit next quarter, what will total sales in dollars have to be next quarter?

A. $76,620
B. $228,750
C. $470,880
D. $574,650
E. None of the above

49. The marketing department forecasts that sales will increase by 40% next quarter if Acme changes the name on
the pencil package to the Prince/DeeBarge moustache pencil. This change will not affect the cost structure for the
pencils. What will be the dollar increase in net income if Acme changes the name?

A. $861,000
B. $360,570
C. $246,000
D. $172,200
E. None of the above

50. Effie’s Development Corporation has just finished the preliminary work on a new product that is just bound to
sweep the nation: Do-it-Yourself Tattoo kits. The variable cost to produce and sell each kit is $9.60. Efie wants to
make at least $75,000 in the first year from this product. If Effie expects to sell 10,000 kits in the first year, and has
$42,500 of fixed costs to cover, what is the minimum price Effie should charge per kit?

A. $11.75
B. $13.85
C. $17.10
D. $21.35
E. None of the above
The following data relates to Genieve’s Massage Parlor for the month of March:

Total number of massages given …… 6,120

Total revenue ………………………. $367,200
Total fixed expenses ……………….. $73,440
Total variable expenses ……………. $146,880

51. What is Genevieve’s margin of safety

A. $122,400

12
 B. $220,320
C. $244,800
D. $365,160
E. None of the above

52. Twyla Tarp sews and sells Itsie Dolls. Twyla sells two types of the huggable and terminally cute Itsie Dolls:
Itchy Itsies and Bitsy Itsies. Next month’s contribution margins for Itchy and Bitsy Itsies are expected to be as
follows:

Itchy Itsies Bitsy Itsies

Sales $1,000 $2,000
Less: Var. Exp 400 1,100
Contribution
Margin $600 $900

Twyla’s fixed expenses next month are expected to be $1,050. What are the total sales dollars for Itchy and Bitsy
Itsies that Twyla will need next month to Breakeven?

A. $1,750
B. $2,000
C. $2,100
D. $2,550
E. None of the above

Use the following to answer questions 53-54:

The Searfoss Co. had the following income statement in February:

Sales $150,000
Costs 170,000
Loss ($20,000)

The firm’s contribution margin percentage at its current selling price of $20 is 40%.

53. What is the firm’s break-even point in sales dollars?

A. $90,000
B. $200,000
C. $170,000
D. $280,000

54. What are the total costs if it sells 8,000 units?

A. $96,000
B. $80,000
C. $176,000
D. $186,000

55. The break-even point in units is calculated using:

A. Fixed Expenses and the contribution margin ratio

B. Variable Expenses and the contribution margin ratio
C. Fixed expenses and the unit contribution margin
D. Variable Expenses and the unit contribution margin

56. Which of the following formulas is used to calculate the break-even point in terms of sales dollars?

13
 A. Fixed Expenses/Unit Contribution Margin
B. Variable Expenses/Contribution margin ratio
C. Fixed Expenses/Contribution margin ratio
D. Net operating income/Unit contribution margin
57. The margin of safety is:

A. The excess of budgeted or actual sales over budgeted or actual variable expenses.
B. The excess of budgeted or actual sales over budgeted or actual fixed expenses
C. The excess of budgeted or actual sales over the break-even volume of sales
D. The excess of budgeted net operating income over actual net operating income

Use the following information to answer the next 4 questions:

The Grager Company currently sells its product for $10 and has variable costs of $6 per unit. Fixed costs are
$30,000.

58. What is the break even point in units?

A. 7,500
B. 5,000
C. 6,000
D. 8,500

59. If fixed costs rise by 20%, what is the breakeven point in units?

A. 7,500
B. 9,000
C. 10,500
D. 4,500

60. If variable costs decline to $4 per unit, what is the new break-even point in sales dollars?

A. $75,000
B. $90,000
C. $50,000
D. $60,000

61. If the selling price per unit declines by 10%, what is the break even point in units?

A. 10,000
B. 9,000
C. 10,500
D. 7,200

62. Omit

14
Use the following to answer questions 63-64:

Sock Company currently sells crew socks and ankle socks. The company has provided the following data:

Product A Product B Total

Sales $100,000 $300,000 $400,000
Variable Costs 70,000 120,000 190,000
Fixed Costs 141,750
Net Operating
Income 68,250

63. What is the overall CM ratio for Sock Company?

A. 55%
B. 45%
C. 47.5%
D. 52.5%

64. What is the breakeven point in sales dollars for Sock Company?

A. $270,000
B. $298,421
C. $257,727
D. $315,000

65. Butteco Corp. has provided the following cost data for last year when 100,000 units were produced and sold:

Raw Materials ……………………….. $200,000

Direct Labor ………………………….. 100,000
MOH …………………………………. 200,000
S&A Expense ………………………… 150,000

All costs are variable except for $100,000 of manufacturing overhead and $100,000 selling and administrative
expenses. There are no beginning or ending inventories. If the selling price is $10 per unit, the net operating
income from producing and selling 110,000 units would be:

A. $450,000
B. $385,000
C. $405,000
D. $560,000

66. Omit

15
67. The following monthly data are available for the W.K. Kent Company:

Product A Product B Product C Total

Sales $100,000 $80,000 $40,000 $220,000
Var. Expense 55,000 64,000 12,000 131,000
Cont. Margin $45,000 $16,000 $28,000 $89,000
Fixed Expenses 76,540
Net Operating
Income $12,460

The Breakeven sales for the company are:

A. $170,089
B. $189,200
C. $139,164
D. $127,567

16
Answer Key
1. D
2. D
3. B
4. E
5. B
6. A
7. D
8. B
9. D
10. A
11. A
12. A
13. A
14. C
15. C
16. B
17. C
18. C
19. D
20. A
21. C
22. B
23. D
24. E
25. E
26. D
27. B
28. D
29. C
30. E, $94,700
31. B
32. C
33. D
34. C
35. B
36. A
37. B
38. C
39. C
40. B
41. A
42. B
43. C

17
44. Red Company wishes to determine the fixed portion of its electrical costs (a mixed cost). Management believes
that the variable portion of the electrical cost is driven by machine hours. Information for the previous three months
is as follows:
Machine hours Electrical cost
January 33,000 $600
February 31,000 $585
March 34,000 $610

A. Using the high-low method, what is the estimated variable cost per machine hour?
= ($610 - $585) / (34,000 – 31,000) = $0.00833
B. What is the estimated fixed electrical cost? =$610 – ($0.00833 x 34,000) = $326.67
C. What is the cost formula for the total electrical cost? Y = 0.00833X + 326.67

45. ABC Corporation’s projected profit for the coming year is as follows:
Total Per Unit Percent
Sales $200,000 $20 100%
Less: Variable Expenses $120,000 $12 60%
Contribution Margin $80,000 $8 40%
Less: Fixes Expenses $64,000
Operating Income $16,000

A. Compute the break-even point in units.

= $64,000/$8 = 8,000 units
B. Compute the contribution margin ratio.
=$8/$20 = 40%
C. Compute the break-even point in sales dollars using the contribution margin ratio.
= $64,000/0.4 = $160,000
D. How many units must be sold to earn a profit of $30,000?
= ($64,000 + $30,000)/$8 = 11,750
E. Compute the additional profit that ABC would earn if sales were $25,000 more than expected.
= $25,000 x 0.4 = $10,000
F. For the projected level of sales, compute the margin of safety in dollars and units.
= 10,000 – 8,000 = 2,000 units =$200,000 – $160,000 = $40,000

18
46. Blue Co. had the following income statement in February:
Unit Price Percentage
Sales $150,000 $20 100%
Variable Costs 90,000 12 60%
Contribution Margin 60,000 8 40%
Fixed Costs 80,000
Loss ($20,000)

The firm’s contribution margin ratio at its current selling price of $20 per unit is 40%.
# units = 150,000 / 20 = 7500
Variable cost % = Sales % - CM% = 100% - 40% = 60%
Variable cost = VC% x Sales Dollars = 60% x 150,000 = 90,000
Fixed costs = Total Costs – Variable Costs = 170,000 – 90,000 = 80,000

A. What is the firm’s break-even point in sales dollars?

= 80,000 / .4 = $200,000
B. What is the firm’s break-even point in units?
= 80,000 / 8 = 10,000
C. What are the total costs if it sells 8,000 units?
= VC + FC = (8,000 x 12) + 80,000 = $176,000

47. B
48. D
49. D
50. D
51. C
52. C
53. B
54. C
55. C
56. C
57. C
58. A
59. B
60. C
61. A
62. Omit
63. D
64. A
65. C
66. Omit
67. B

19