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# Multiple Choice

1. As the cost driver activity level decreases within the relevant range:
a)total fixed costs increase
b)fixed costs per unit decreases
c)total variable costs decrease
d)variable costs per unit decreases

2. The following information is for Allen Corporation:

Total Fixed Cost \$313,500
Variable costs per unit \$101
Selling price per unit \$163

The contribution-margin ratio is:
a)35.7%
b)38.0%
c)55.6%
d)64.3%

3. Desks R' Us Corporation sells desks at \$480 per desk. The costs associated with each desk are as follows:

Direct Materials \$195
Direct labor 126

Total fixed costs for the period are \$456,840. The break-even point in desks is:
a)952 desks
b)1,228 desks
c)4,230 desks
d)5,458 desks

4. On Fire Company, a producer of salsa, has the following information:

Income tax rate 30%
Selling price per unit \$5.00
Variable cost per unit \$3.00
Total fixed costs \$90,000.00

The contribution margin per unit is:

a)\$2.00
b)\$3.00
c)\$5.00
d)\$8.00

#### Solution Preview

1. c)total variable costs decrease

The variable cost are fixed on a per unit basis. As the activity reduces, the ...

#### Solution Summary

The solution explains some multiple choice questions in accounting

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