Variable Cost and Points Question

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Question 1 1. Mrs. Granberry is going to sell Christmas tree lights for $20 a box. The lights cost Marsha $5 a unit and any unsold lights can be returned for a full refund. She is planning to rent a booth at the upcoming Happy Holidays Convention, which offers three options: 1. paying a fixed fee of $1,500, or 2. paying a $500 fee plus 10% of revenues made at the convention, or 3. paying 25% of revenues made at the convention.Which of the following statements is FALSE? Answer | | One of the options will allow Marsha to break even, even if she doesn 't sell any lights. | | | Her decision will determine the risk she faces. | | | Contribution margin will vary depending upon the option chosen. | | | Operating profit…show more content…
Information of average revenue and costs is as follows: Selling price per unit $28.50 Variable costs per unit: Direct material $5.25 Direct manufacturing labour $1.15 Manufacturing overhead $0.25 Selling costs $1.85 Annual fixed costs $110,000The number of units that Franscioso must sell each year to break even is: Answer | | 1,000 units | | | 4,000 units | | | 5,500 units | | | indeterminable | 1 points Question 13 1. Answer the following questions using the information below:The following information is for the Jeffries Corporation: Product A: Revenue $16.00 Variable Cost $12.00 Product B: Revenue $24.00 Variable Cost $16.00 Total fixed costs $75,000If the sales mix shifts to four units of Product A and one unit of Product B, then the weighted-average contribution margin will: Answer | | decrease per unit | | | increase per unit | | | stay the same | | | be indeterminable | 1 points Question 14 1. The opportunity cost of holding significant inventory includes: Answer | | additional insurance costs | | | the interest forgone on an alternative investment | | | additional storage costs | | | All of these answers are correct. | 1 points Question 15 1. Cost accounting: Answer | | provides information on the cost of servicing commercial customers | | | provides information on the efficiency of factory labour |

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