Question 1
Redford, Inc. has provided the following data:
| Sales Price | $200.00 | per unit | |
| Sales | 6,000 | Units | |
| Fixed Cost | $300,000 | ||
| Variable cost | $100.00 | per unit | |
If the dollar contribution margin per unit is increased by 10%, total fixed cost is decreased by 20%, and all other factors remain the same, net income will how much?
Question 2
Gardner Manufacturing Company produces a product that sells for $120. A selling commission of 10% of the selling price is paid on each unit sold. Variable manufacturing costs are $60 per unit. Fixed manufacturing costs are $20 per unit based on the current level of activity, and fixed selling and administrative costs are $16 per unit.
The contribution margin per unit is how much?
Question 3
Within the relevant range, the variable cost per unit:
|
A. |
remains constant as activity changes |
|
|
B. |
increases as activity increases. |
|
|
C. |
decreases as activity increases. |
|
|
D. |
can increase or decrease as the activity changes. |