can buy a newer production machine that will increase fixed costs by $8,000 per
ID: 2554600 • Letter: C
Question
can buy a newer production machine that will increase fixed costs by $8,000 per variable 32. Mullis Corp. manufact ures DVDs that sell for $5.00. Fixed costs are 528,000 and variable costs are $3.60 per unit. Mullis year, but will decrease machine have on Mullis' break-even point in units? costs by $0.40 per unit. What effect would the purchase of the new A. 4,444 unit increase. B. 9,850 unit decrease. C. 5,714 unit increase D. 4.444 unit decrease E. No effect. 33. The following information is available for a company's utility cost for operating its machines over the last four months. Machine hours Month January February 900 1,800 2,400 600 Utility cost $5.450 $6,900 $8,100 $3,600 March April Using the high-low method, the estimated variable cost per unit for utilities is: A. $3.38 B. $6.00 C. $2.50 D. $4.22 E. $6.17 34. Managerial accounting is different from financial accounting in that: A Managerial accounting is more focused on the organization as a whole and financial accounting is more focused on subdivisions of the organization. B. Managerial accounting never includes nonmonetary information. C. Managerial accounting includes many projections and estimates whereas financial accounting has a minimum of predictions. D. Managerial accounting is used extensively by investors, whereas financial accounting is used only by creditors E. Managerial accounting is mainly used to set stock prices. 10Explanation / Answer
Q32. Answer is E. No effect. Explanation: Selling price: $5.00 per unit Variable cost per unit: $ 3.60 per unit Contribution margin per unit: Selling price -variable cost = 5.00-3.60 = 1.40 per unit Fixed cost: $ 28000 Break even point in units: Fixed cost / Contribution per unit 28000 /1.40 = 20,000 units Revised VC per unit: 3.60 -0.40 =3.20 Revised Contribution margin per unit = 5.00 - 3.20 = 1.80 per unit Revised fixed cost: 28000+8000= 36000 Break even in units: 36000 /1.80 = 20,000 units Q33. Answer is C. $ 2.50 per MH Explanation: At high point: Total cost $ 8100 and MH 2400 At Llow point: Total cost $ 3600 and Mh 600 Vvariable cost per MH = Difference in cost / Difference in MH (8100-3600) / (2400-600) = $2.50 per MH Q34. Answer is C. Managerial Accounting includes many predictions and estimates whereas financial accounting has a minimum of predictions.
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