In class we compared the total cost of living alone versus with 1 or 2 roommates.  Which of the following is a true statement about that comparison?

When a company structures their costs as mostly fixed costs and very few variable costs, a large increase in sales revenue will result in:

Bryan Inc. sells a product for $50 per unit. Variable costs are $30 per unit, and total fixed costs are $20,000. How many units must the company sell to earn a profit of $10,000?

What type of cost stays the same per unit, even when activity levels change?  

When you are completely done with your exam please rip up your scratch paper if you used one. You can KEEP your notes page.  Speak your name one more time.   Thank you and have a great rest of your day!    

  Bryan Inc. makes a product that sells for $150 per unit. The company’s costs are as following: Variable manufacturing costs $60 per unit Variable selling expenses $21 per unit Total fixed manufacturing costs $100,000 allocated to 10,000 units produced Total fixed selling & administrative expenses $200,000 allocated to 10,000 units produced Calculate the contribution margin per unit.

Q201

Which of the following actions will decrease net income?  Assume no change in the number of items sold.  

Indiana University is deciding whether to renovate one of two dorms (they can only choose one of the dorms).  Both dorms provide 500 rooms for students. Which of the following is relevant to the decision: A Estimated cost of paint supplies  $500  $500 B Cost to remove toxic insulation from Dorm 1. Dorm 2 does not have this insulation.  $8,000  $  0   C Roofing materials  $1,000  $800 D Architect fees  $1,500  $1,500 E Labor costs  $10,000  $10,000 F Lost dorm rental fees if the dorm is shut down during renovation   $13,000  $15,000

  Bryan Inc. sells products for $90 each that have variable costs of $62 per unit. The company’s annual fixed cost is $590,800 Calculate the breakeven point in units. Round the final answer UP to the next unit if necessary.