Multiple choice

1. How many units must BAC Company sell to break even if the selling price per unit is $8.50, variable costs are $4.00 per unit, and fixed costs are $9,000?

A) 1,000

B) 1,059

C) 2,000

D) 2,250

2. Field Legal Services is trying to determine the variable and fixed elements of its service overhead. The following data have been collected from recent activity:

            Total Service Overhead    Cases Worked

March                     $22,900                    112

April                       20,800                      98

May                              26,400                    138

The formula for total service overhead costs is

A) $5,600 + $140 per case.

B) $5,600 + $40 per case.

C) $7,823 + $134.62 per case.

D) $7,080 + $140 per case.

3. Dilly LLC, wants to make a profit of $30,000. It has variable costs of $85 per unit and fixed costs of $20,000. How much must it charge per unit if 5,000 units are sold?

A) $70 

B) $55

C) $85

D) $95

E) $100

4. Walton's Warehouse reported sales of $640,000, a contribution margin of $8 per unit, fixed costs of $314,000, and a profit of $70,000. How many units did Walton's Warehouse sell?

A) 8,750 units

B) 28,375 units

C) 48,000 units

D) 67,625 units