11 chambers company sells glass vases at a wholesale price of 2 50 per unit variable 4311331

11) Chambers Company sells glass vases at a wholesale price of $2.50 per unit.  Variable cost is $1.75 per unit.  Chambers' fixed costs are $6,500 per month.  If Chambers wishes to make operating income of $2,500, how many units must be sold?

A) 11,500

B) 11,750

C) 12,000

D) 12,500

12) Chambers Company sells glass vases at a wholesale price of $2.50 per unit.  Variable cost is $1.75 per unit.  Chambers' fixed costs are $6,500 per month.  Chambers is currently selling 15,000 units per month.  If Chambers wants to increase operating income by 20%, how many more units, over and above the current volume, must they sell?  (Please round to nearest whole number.)

A) 1,166

B) 1,333

C) 1,267

D) 5,666

13) Runnymeade Products makes a racing bicycle tire.  Cost and volume data are below.

Price per unit	$18.00
Variable cost per unit	$14.50
Fixed cost per month	$28,000
Current sales volume (units)	10,000

How much is current monthly operating income?

A) $7,000

B) $6,850

C) $5,900

D) $7,250

14) Runnymeade Products makes a racing bicycle tire.  Cost and volume data are below.

Price per unit	$18.00
Variable cost per unit	$14.50
Fixed cost per month	$28,000
Current sales volume (units)	10,000

If management wants to earn $9,000 of operating income, how many units must be sold?  (Please round to nearest whole number.)

A) 11,667

B) 10,571

C) 9,667

D) 10,333

15) Bell Products manufactures packs of pesticides which are sold to farmers.  Cost, volume and price data are as follows:

Price per unit	$25.00
Variable cost per unit	$20.00
Fixed cost per month	$8,000
Current sales volume (units)	3,000

How much is Bell's current monthly operating income?

A) $1,000

B) $5,000

C) $6,750

D) $7,000

16) Bell Products manufactures packs of pesticides which are sold to farmers.  Cost, volume and price data are as follows:

Price per unit	$25.00
Variable cost per unit	$20.00
Fixed cost per month	$8,000
Current sales volume (units)	3,000

If Bell wishes to earn $10,000 of operating income, what volume of sales is needed?

A) 3,150

B) 3,200

C) 3,500

D) 3,600

17) Bell Products manufactures packs of pesticides which are sold to farmers.  Cost, volume and price data are as follows:

Price per unit	$25.00
Variable cost per unit	$20.00
Fixed cost per month	$8,000
Current sales volume (units)	3,000

If Bell wishes to increase their current operating income by 10%,  what volume of sales is needed?

A) 3,140

B) 3,200

C) 3,500

D) 3,625

18) Bell Products manufactures packs of pesticides which are sold to farmers.  Cost, volume and price data are as follows:

Price per unit	$25.00
Variable cost per unit	$20.00
Fixed cost per month	$8,000
Current sales volume (units)	3,000

If Bell wishes to double their current operating income, what volume of sales is needed?

A) 3,140

B) 4,400

C) 3,500

D) 3,625

19) Juan Martinez played classical guitar professionally until his motorcycle accident left him disabled.  After long months of therapy, he hired an experienced luthier (maker of stringed instruments) and opened a small shop that makes and sells Spanish guitars.  The guitars sell for $600, and the fixed monthly operating costs are as follows:

Rent and utilities$960

Wages and benefits of luthier$1,500

Other$900

Juan got confused when his accountant told him about contribution margin ratios, but he understood clearly that for every dollar of sales, $0.70 went to cover his fixed costs, and that anything past that point was pure profit.

How many guitars does Juan have to sell each month to break even?

A) 6

B) 5

C) 12

D) 8

20) Juan Martinez played classical guitar professionally until his motorcycle accident left him disabled.  After long months of therapy, he hired an experienced luthier (maker of stringed instruments) and opened a small shop that makes and sells Spanish guitars.  The guitars sell for $600, and the fixed monthly operating costs are as follows:

Rent and utilities$960

Wages and benefits of luthier$1,500

Other$900

Juan got confused when his accountant told him about contribution margin ratios, but he understood clearly that for every dollar of sales, $0.70 went to cover his fixed costs, and that anything past that point was pure profit.

How many dollars of revenue does Juan have to make each month to break even?

A) $3,950

B) $4,800

C) $3,360

D) $5,200

21) Juan Martinez played classical guitar professionally until his motorcycle accident left him disabled.  After long months of therapy, he hired an experienced luthier (maker of stringed instruments) and opened a small shop that makes and sells Spanish guitars.  The guitars sell for $600, and the fixed monthly operating costs are as follows:

Rent and utilities$960

Wages and benefits of luthier$1,500

Other$900

Juan got confused when his accountant told him about contribution margin ratios, but he understood clearly that for every dollar of sales, $0.70 went to cover his fixed costs, and that anything past that point was pure profit.

Juan wishes to make $2,500 of operating profit each month.  If so, how many guitars will Juan have to sell?

A) 12

B) 14

C) 18

D) 9

22) Juan Martinez played classical guitar professionally until his motorcycle accident left him disabled.  After long months of therapy, he hired an experienced luthier (maker of stringed instruments) and opened a small shop that makes and sells Spanish guitars.  The guitars sell for $600, and the fixed monthly operating costs are as follows:

Rent and utilities$960

Wages and benefits of luthier$1,500

Other$900

Juan got confused when his accountant told him about contribution margin ratios, but he understood clearly that for every dollar of sales, $0.70 went to cover his fixed costs, and that anything past that point was pure profit.

Juan wishes to make $2,500 of operating profit each month.  If so, how much sales revenue will Juan have to make?

A) $8,760

B) $8,140

C) $8,400

D) $7,960

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