4. A company sells two products, one with sales of $10,000 and variable expenses of $2,500, another with sales of $46,000 and variable expenses of $15,420. Fixed expenses are $33,100. Breakeven point for the whole company is close to: A. $33,100 B. $2,900 C. $51,020 D. $48,676

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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A company has the following overhead costs and activities:
Estimated
Expected Activity
Product V Product W Product X
Overhead
Activities and Activity Measures
Machine setups (setups)
Processing customer orders (orders)
Assembling products (assembly-hours) $9,178.00
Cost
S7,234.50
$3,565.50
69
12
10
20
21
492
697
111
4. A company sells two products, one with sales of $10,000 and variable expenses of $2,500,
another with sales of $46,000 and variable expenses of $15,420. Fixed expenses are
$33,100.
Breakeven point for the whole company is close to:
А. 833,100
В. $22,900
C. $51,020
D. $48,676
A company that reduces the proportion of variable costs in its cost structure will:
A. enjoys higher stability in profits.
B. increase its profits more when the economy is good.
C. have a loss more easily when the economy is bad.
D. be indifferent.
5.
6.
is normally recorded on any financial statement but irrelevant in decision
making which is not.
A. Sunk cost
B. Incremental cost
C. Differential cost
D. Opportunity cost
Transcribed Image Text:A company has the following overhead costs and activities: Estimated Expected Activity Product V Product W Product X Overhead Activities and Activity Measures Machine setups (setups) Processing customer orders (orders) Assembling products (assembly-hours) $9,178.00 Cost S7,234.50 $3,565.50 69 12 10 20 21 492 697 111 4. A company sells two products, one with sales of $10,000 and variable expenses of $2,500, another with sales of $46,000 and variable expenses of $15,420. Fixed expenses are $33,100. Breakeven point for the whole company is close to: А. 833,100 В. $22,900 C. $51,020 D. $48,676 A company that reduces the proportion of variable costs in its cost structure will: A. enjoys higher stability in profits. B. increase its profits more when the economy is good. C. have a loss more easily when the economy is bad. D. be indifferent. 5. 6. is normally recorded on any financial statement but irrelevant in decision making which is not. A. Sunk cost B. Incremental cost C. Differential cost D. Opportunity cost
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