Maxine's budget for the upcoming year revealed the following figures:

If the company's break-even sales total $750,000, Maxine's safety margin would be:
$246,000.
$336,000.
$(90,000).
$90,000.
$696,000.
You are analyzing Becker Corporation and Newton Corporation and have concluded that Becker has
a higher operating leverage factor than Newton. Which one of the following choices correctly depicts
(1) the relative use of fixed costs (as opposed to variable costs) for the two companies and (2) the
percentage change in income caused by a change in sales? A

Wellcom Corporation has the following sales mix for its three products: A, 20%; B, 35%; and C, 45%.
Fixed costs total $400,000 and the weighted-average contribution margin is $100. How many units
of product A must be sold to break-even?
Cannot be determined based on the information presented.
20,000.
800.
4,000.
An amount other than those above.
t a volume level of 500,000 units, Sullivan reported the following information:

The company's contribution-margin ratio is closest to:

0.60.
0.67.
0.40.
an amount other than those above.
0.33.

Grey, Inc. sells a single product for $20. Variable costs are $8 per unit and fixed costs total $120,000
at a volume level of 5,000 units. Assuming that fixed costs do not change, Green's break-even sales
would be:
$200,000.
$160,000.
an amount other than those above.
$300,000.
$480,000.
Learning Objective: 07-01 Compute a break-even point using the contribution-margin approach and
the equation approac

Grime-X is studying the profitability of a change in operation and has gathered the following
information:

Should Grime-X make the change?

Yes, the company will be better off by $6,000.
No, because sales will drop by 3,000 units.
No, because the company will be worse off by $4,000.
It is impossible to judge because additional information is needed.
No, because the company will be worse off by $22,000.
Learning Objective: 07-04 Apply CVP analysis to determine the effect on profit of changes in fixed expenses;
variable expenses; sales prices; and sales volume.
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he following information relates to Dazie Company:

Dazie's operating leverage factor is closest to:

0.400.
6.000.
0.067.
0.167.
2.500.
Learning Objective: 07-08 Explain the role of cost structure and operating leverage in CVP relationships.
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A recent income statement of Suni Corporation reported the following data:

If these data are based on the sale of 20,000 units, the break-even point would be:
33,333 units.
11,628 units.
an amount other than those above.
12,500 units.
7,500 units.
Learning Objective: 07-01 Compute a break-even point using the contribution-margin approach and
the equation approach.

Danielle sells a single product at $20 per unit. The firm's most recent income statement revealed unit
sales of 100,000, variable costs of $800,000, and fixed costs of $400,000. If a $4 drop in selling
price will boost unit sales volume by 20%, the company will experience:
an $80,000 drop in profit.
no change in profit because a 20% drop in sales price is balanced by a 20% increase in volume.
a $240,000 drop in profit.
a change in profit other than those above.
a $400,000 drop in profit.
Learning Objective: 07-04 Apply CVP analysis to determine the effect on profit of changes in fixed
expenses; variable expenses; sales prices; and sales volume.