hampton company a producer of computer disks has the following information income ta 4309816

Hampton Company, a producer of computer disks, has the following information:

Income tax rate

40 percent

Selling price per unit


Variable cost per unit


Total fixed costs


36) What is the contribution margin per unit?

A) 0.40

B) 0.60

C) 1.00

D) None of the above.

37) What is the contribution-margin ratio?

A) 40 percent

B) 60 percent

C) 100 percent

D) None of the above.

38) What is the break-even point in units?

A) 36,000

B) 90,000

C) 60,000

D) 54,000

39) What is the break-even point in dollars?

A) $54,000

B) $36,000

C) $90,000

D) $60,000

40) The horizontal axis on the cost-volume-profit graph is the

A) dollars of cost.

B) sales volume.

C) dollars of revenue.

D) net income.

41) The cost-volume-profit graph does NOT show

A) the break-even point.

B) the profit or loss at any rate of activity.

C) the fixed cost per unit.

D) sales volume.

42) Which of the following is NOT an underlying assumption of the cost-volume-profit graph?

A) Expenses are categorized into variable and fixed.

B) Sales mix will not be constant.

C) Revenues and expenses are linear over the relevant range.

D) Efficiency and productivity will be unchanged.

43) If fixed expenses were doubled and contribution margin per unit was cut in half, then the break-even point would

A) be cut in half.

B) double.

C) triple.

D) quadruple.

The following information is for Lyceum, Ltd.:

Total fixed costs


Variable costs (per unit)


Selling price (per unit)


44) If management has a targeted net income of $21,000 (ignore income taxes), then the number of units which must be sold is

A) 2,036.

B) 2,336.

C) 6,540.

D) 5,700.

45) If management has a targeted net income of $27,000 (ignore income taxes), then sales revenue should be

A) $263,667.

B) $474,600.

C) $108,964.

D) $169,500.

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