# Question 1 redford, inc. has provided the following data:

Question 1

Redford, Inc. has provided the following data:

Sales Price \$200.00per unit

Sales 6,000Units

Fixed Cost \$300,000

Variable cost \$100.00per 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:

A.  decrease by \$60,000.

B.  increase by \$60,000.

C.  increase by \$120,000.

D.  increase by \$420,000.

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:

a.  \$104

b.  \$72

c.  \$60

d.  \$48

Question 3

Iacopi Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for \$172.50 per unit.

Sales volume (units) 4,000 5,000

Cost of sales \$307,600 \$384,500

Selling and administrative costs \$321,200 \$337,000

The best estimate of the total contribution margin when 4,300 units are sold is:

a.  \$343,140

b.  \$65,790

c.    \$121,260

d.  \$411,080

Question 4

Shipping expense is \$9,000 for 8,000 pounds shipped and \$11,250 for 11,000 pounds shipped. Assuming that this activity is within the relevant range, if the company ships 9,000 pounds, its expected shipping expense is closest to:

a.  \$10,125

b.  \$8,583

c.  \$9,972

d.  \$9,750

Question 5

Fixed cost per unit increases as activity decreases and decreases as activity increases.

True

False

Question 6

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.

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