Stealth Software Inc. has the following information available from last year for

Question

Stealth Software Inc. has the following information available from last year for one of its software products:

Sales revenue
$30,000
Variable costs
4,950
Fixed costs
4,000
Net income
$21,050
If the software had a sales price of $30 per unit, what is the variable cost per unit?
Answer
a. $164.00
b. $0.20
c. $4.95
d. $25.05
Question 50

Refer to the Stealth Software Inc. information above. If the software had a sales price of $30 per unit, what is the contribution margin per unit?
Answer
a. $34.95
b. $21.05
c. $25.05
d. can not be determined
2 points
Question 51

Refer to the Stealth Software Inc. information above. If the sales price per unit is $30 and the company expects a 30% increase in sales volume this year along with a 20% decrease in fixed costs. What will be expected net income this year?
Answer
a. $30,850
b. $41, 065
c. $23,155
d. $29,365

Explanation / Answer

Sales = sales revenue/price = 30,000/30 = 1,000 units. Variable cost per unit = Variable costs/# of units = 4950/1000 = 4.95 Answer C, $4.95 Same as above, 1,000 units were sold. CM = sales price – variable costs = 30-4.95 = 25.05 Answer C, $25.05 25.05*1,000*1.3 – 4,000*.80 = 29,365 Answer: D, $29,365

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