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# Marcus Break even; Northenscold contribution margin, more...

1. Answer the following question using the information below.

Marcus intends to sell his customers a special round-trip airline ticket package. He is able to purchase the package from the airline carrier for \$150 per customer. The round-trip tickets will be sold for \$200 each and the airline intends to reimburse Marcus for any unsold ticket packages. Fixed costs include \$5,000 in advertising costs.

How many ticket packages will Marcus need to sell to break even?

a) 34 packages
b) 50 packages
c) 100 packages
d) 150 packages

2. Answer the following question using the information below.

Northenscold Company sells several products. Information of average revenue and costs is as follows:

Selling price per unit \$20.00
Variable costs per unit:
Direct material \$4.00
Direct manufacturing labor \$1.60
Selling costs \$2.00
Annual fixed costs \$96,000

The contribution margin per unit is _____.

a) \$6
b) \$8
c) \$12
d) \$14

3. Which of the following manufactured products would use job-costing?

a) 767 jet aircraft
b) 19-inch television sets
c) laptop computers
d) mattress manufacturer

4. The first-in, first-out process-costing method calculates the equivalent units by _____.

a) considering only the work done during the current period
b) the units started during the last period minus the units in ending inventory
c) the units started during the last period plus the units in ending inventory
d) the equivalent units completed during the current period plus the equivalent units in ending inventory

5. The first step in the FIFO process-costing method is _____.

a) summarize the flow of physical units of production
b) computer output in terms of equivalent units
c) summarize total costs to account for
d) compute costs per equivalent unit

#### Solution Preview

1. Answer the following question using the information below.

Marcus intends to sell his customers a special round-trip airline ticket package. He is able to purchase the package from the airline carrier for \$150 per customer. The round-trip tickets will be sold for \$200 each and the airline intends to reimburse Marcus for any unsold ticket packages. Fixed costs include \$5,000 in advertising costs.

How many ticket packages will Marcus need to sell to break even?

a) 34 packages
b) 50 packages
c) 100 packages
d) 150 packages

\$5,000 / (\$200-\$150) = 100 packages, pick C

2. Answer the following question using ...

#### Solution Summary

A sentence or two assists you in understanding these practice exam questions.

\$2.19