multiple
2.5 Points 
A manager should always reject a special order if:
A. the special order price is less than the variable costs of the order. 

B. there is available excess capacity. 

C. the special order price is less than the regular sales price. 

D. the special order will require variable nonmanufacturing expenses. 
Question 2 of 40 
2.5 Points 
The effect of a plant closing on employee morale is an example of which of the following?
A. A qualitative factor 

B. A quantitative factor 

C. A sunk cost 

D. A variable cost 
Question 3 of 40 
2.5 Points 
Corny and Sweet grows and sells sweet corn at its roadside produce stand. The selling price per dozen is $3.75, variable costs are $1.25 per dozen, and total fixed costs are $750.00. What are breakeven sales in dollars?
A. $563 

B. $300 

C. $375 

D. $1,125 
Question 4 of 40 
2.5 Points 
Which of the following best describes a “sunk cost”?
A. Costs that were incurred in the past and cannot be changed 

B. Benefits foregone by choosing a particular alternative course of action 

C. A factor that restricts the production or sale of a product 

D. Expected future data that differ among alternatives 
Question 5 of 40 
2.5 Points 
Pluto Incorporated provided the following information regarding its single product:
Direct materials used 
$240,000 
Direct labor incurred 
$420,000 
Variable manufacturing overhead 
$160,000 
Fixed manufacturing overhead 
$100,000 
Variable selling and administrative expenses 
$60,000 
Fixed selling and administrative expenses 
$20,000 
The regular selling price for the product is $80. The annual quantity of units produced and sold is 40,000 units (the costs above relate to the 40,000 units production level). The company has excess capacity and regular sales will not be affected by this special order. There was no beginning inventory. What would be the effect on operating income of accepting a special order for 3,500 units at a sale price of $55 per product?
A. Increase by $115,500 

B. Increase by $269,500 

C. Decrease by $115,500 

D. Decrease by $269,500 
Question 6 of 40 
2.5 Points 
A product is sold at $60.00 per unit, the variable expense per unit is $30, and total fixed expenses are $200,000, what are the breakeven sales in dollars?
A. $3,333 

B. $100,000 

C. $133,333 

D. $400,000 
Question 7 of 40 
2.5 Points 
“Contribution margin per unit” is best described by which of the following?
A. Sales price per unit minus fixed cost per unit 

B. Sales price per unit minus variable cost unit 

C. Sales price per unit minus fixed and variable costs per unit 

D. Units sold time contribution margin ratio 
Question 8 of 40 
2.5 Points 
If total fixed costs are $455,000, the contribution margin per unit is $25.00, and targeted operating income is $25,000, how many units must be sold to breakeven?
A. 11,375,000 

B. 19,200 

C. 18,200 

D. 625,000 
Question 9 of 40 
2.5 Points 
The horizontal line intersecting the vertical yaxis at the level of total cost on a CVP graph represents:
A. total costs. 

B. total variable costs. 

C. total fixed costs. 

D. breakeven point. 
Question 10 of 40 
2.5 Points 
To find the breakeven point using the shortcut formulas, you use:
A. zero for the contribution margin per unit. 

B. zero for the fixed expenses. 

C. zero for the contribution margin ratio. 

D. zero for the operating income. 
Question 11 of 40 
2.5 Points 
In a special sales order decision, incremental fixed costs that will be incurred if the special order is accepted are considered to be:
A. opportunity costs. 

B. irrelevant to the decision. 

C. relevant to the decision. 

D. sunk costs. 
Question 12 of 40 
2.5 Points 
Assume the following amounts:
Total fixed costs 
$24,000 
Selling price per unit 
$20 
Variable costs per unit 
$15 
If sales revenue per unit increases to $22 and 12,000 units are sold, what is the operating income?
A. $264,000 

B. $60,000 

C. $108,000 

D. $84,000 
Question 13 of 40 
2.5 Points 
Samson Incorporated provided the following information regarding its only product:
Sale price per unit 
$50.00 
Direct materials used 
$160,000 
Direct labor incurred 
$185,000 
Variable manufacturing overhead 
$120,000 
Variable selling and administrative expenses 
$70,000 
Fixed manufacturing overhead 
$65,000 
Fixed selling and administrative expenses 
$12,000 
Units produced and sold 
20,000 


Assume no beginning inventory 

Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 1,200 units at a sale price of $47 per product? The 1,200 units would not require any variable selling and administrative expenses. (NOTE: Assume regular sales are not affected by the special order.)
A. Increase by $84,300 

B. Decrease by $28,500 

C. Increase by $24,300 

D. Increase by $28,500 
Question 14 of 40 
2.5 Points 
The Muffin House produces and sells a variety of muffins. The selling price per dozen is $15, variable costs are $9 per dozen, and total fixed costs are $4,200. How many dozen muffins must The Muffin House sell to breakeven?
A. 10,500 

B. 700 

C. 280 

D. 175 
Question 15 of 40 
2.5 Points 
Sky High Seats manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but is currently producing and selling 75,000 seats per year. The following information relates to current production:
Sale price per unit 
$400 


Variable costs per unit: 
$220 
Manufacturing 
$50 
Marketing and administrative 



Total fixed costs: 

Manufacturing 
$750,000 
Marketing and administrative 
$200,000 
If a special sales order is accepted for 3,000 seats at a price of $300 per unit, and fixed costs increase by $10,000, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)
A. Decrease by $80,000 

B. Increase by $230,000 

C. Increase by $90,000 

D. Increase by $80,000 
Question 16 of 40 
2.5 Points 
The breakeven point may be defined as the number of units a company must sell to do which of the following?
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