pps/assessment/t ake/laun Assessmients-ROSTER 2016 dit View Favorites Tools Help

ID: 2493535 • Letter: P

Question

pps/assessment/t ake/laun Assessmients-ROSTER 2016 dit View Favorites Tools Help QUESTION 1 Assume a sales price per unit of $20, variable cost per unit $16, and total fixed costs of $168,000. What is the breakeven point? 0 A 42,000 units O B.10,500 units C.$42,000 D $10,500 QUESTION 2 Georgiana operates a nail salon She is tying to plan her costs for the next month and is uncertain as to how to estimate those cos . following information she collected, based on number of customers per month Based on the High/Low method if Georgiana estimates 1,400 customers next month, what is the estimated cost for nail supplies? Number of Customers Nail supplies Equipment Re Electricity Total 1.3001.800 1.500 1200 $4,030 $5,580 4,650 3,720 2.200 2.200 2.200 2,200 $6.504 58,144 $7,160 $6,176 A$4030 B $4,340 OC.$4650 OD$3.720 QUESTION 3 The combution margin ratio 20% "Sara w break oven at ths level of sales Sara, inc isplarning to sell 800,000 units for $150 per unit B$660,000 D $960,000

Explanation / Answer

Question 1

Contribution margin per unit = Sale price – Variable cost = $20 - $16 = $4

Breakeven point = Total fixed costs/Contribution margin per unit = $168,000/$4 = 42,000 units

Hence, Answer is A.42,000 units

Question 2

Using high-low method,

Variable cost per unit = (Cost at highest unit – Cost at lowest unit)/Highest unit – lowest unit

Highest unit

Lowest unit

Difference

Variable cost per customer

No. of Customers

1800

1200

600

Nail Supplies

$ 5,580

$ 3,720

$ 1,860

$ 3.10

Variable cost of nail supplies at 1800 customers = $3.10 * 1800 = $5,580

Total nail supplies cost at 1800 customers = $5,580

Fixed nail supplies cost = $5,580 - $5,580 = $0

Nail supplies cost at 1,400 customers = $3.10 * 1400 = $4,340

Hence Answer is B.$4,340