15) Which of the following would produce the largest increase in the contributio
ID: 2511940 • Letter: 1
Question
15) Which of the following would produce the largest increase in the contribution margin per 15) unit? A) A 17% decrease in fixed cost. B) A 14% increase in variable cost. C) A 15% decrease in selling price. DA 7% increase in selling price. E) A 23% increase in the number of units sold. 16) 16) Which of the following occurs if a company was able to reduce its variable cost per unit? Break-even Point Increase Decrease Increase Decrease No effect Contribution Margin A. Increase B. Increase Decrease D. Decrease E. Increase B) Choice B C)Choice C D) Choice D E) Choice E A) Choice A ? 17) 17) Which of the following occurs if a company experiences a decrease in its fixed costs A) The break-even point would decrease. B) More than one of the answers would occur. C) The contribution margin would decrease. D) Income would decrease. E) The contribution margin would increase. 18) At a volume of 20,000 units, Almount Industries reported sales revenues of $1,000,000, 18) variable costs of $300,000, and fixed costs of $260,000. The company's contribution margin per unit is: A) $22. B) $28 C $37. D) $35. E) None of the answers is correct. 19) At a volume of 20,000 units, Almount Industries reported sales revenues of $1,000,000, 19) variable costs of $300,000, and fixed costs of $260,000. The company's break-even point in units is: A) 7,429 (rounded) B) 8,667 (rounded). C) 7,027 (rounded). D) 9,286 (rounded) E) None of the answers is correct.Explanation / Answer
Answer For 15th Question: D
That is 7% increase in selling price leads to produce the largest increase in the contribution margin per unit. Because if we wants to increase in contribution margin per unit, then it is possible in two ways. One is Increase selling price per unit and another one is decrease in variable cost per unit.
Answer For 16th Question: B
The company is able to decrease the variable cost per unit, it leads to increase the contribution margin and as well as decrease the Break-even point.
Answer For 17th Question: A
If company would decrease the fixed cost, then automatically we can achieve break-even point in early stage, i.e., Break-even point will decrease.
Answer For 18th Question: D
Selling price per unit = $50 ($ 1,000,000/20,000 units)
Variable cost per unit =$ 15 ($ 300,000/20,000 units)
Contribution margin per unit= $ 35
Answer For 19th Question: A
Break-even point in unit= fixed cost/contribution per unit
=$260,000/$35
=7428.57 units or approximately 7429 units.
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