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1

A company has provided the following data:

Sales12,000 units
Sales price$100 per unit
Variable cost$50 per unit
Fixed cost$300,000

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 $240,000.
2

Hamada Company sells a single product. The product has a selling price of $100 per unit and variable expenses of 80% of sales. If the company's fixed expenses total $150,000 per year, then it will have a break-even of:

A)$3,750.
B)$15,000.
C)$187,500.
D)$750,000.
3

The following is Tyler Corporation's contribution format income statement for last month:

Sales $4,000,000
Less variable expenses 2,800,000
Contribution margin 1,200,000
Less fixed expenses 720,000
Net income $ 480,000

The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. How many units would the company have to sell to attain target profits of $600,000?

A)88,000
B)100,000
C)106,668
D)150,000
4

The following is Tyler Corporation's contribution format income statement for last month:

Sales $4,000,000
Less variable expenses 2,800,000
Contribution margin 1,200,000
Less fixed expenses 720,000
Net income $ 480,000

The company has no beginning or ending inventories. A total of 80,000 units were produced and sold last month. What is the company's degree of operating leverage?

A)0.12
B)0.4
C)2.5
D)3.3





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