Multiple choice

1)  Which of the following is an example of a fixed cost?

a) Equipment cost

 b)   Power cost

c)  Labor cost

d)  Material cost

2)  Which of the following is an example of a variable cost?

a)  Building cost

b)  Equipment cost

c) Labor cost

d)  Property taxes

3)  Given a facility with a total fixed cost of $420, variable cost per unit of $20, and a selling price per unit of $30, which of the following is the profit at a forecasted production level of

a. $80

b. $500

c. $580

d. $420

4)  Engler Corporation manufactures specialized blades. Last year the company manufactured and sold 30,000 blades. This year it is planning on manufacturing 35,000 blades without adding new machinery and equipment (i.e. fixed costs). Its total estimated cost for the

30,000 units it made last year are as follows:

Direct Material (variable)            $250,000

Direct labor (variable)                    $375,000

Manufacturing Overhead

Variable portion                             $90,000

Fixed portion                             $75,000

Selling and Administrative

Variable portion                           $45,000

Fixed portion                                  $55,000

What is the break-even price for the blades?

a) $29.67

b) $29.04

c) $25.83

d) $25.17