Multiple choice

1. For every unit that a company produces and sells above the breakeven point, its profitability is improved (ignoring taxes) by the unit's

A) gross margin.

B) selling price minus fixed cost.

C) variable cost.

D) contribution margin.

2. Excerpts from a cost-volume-profit analysis indicate fixed costs of $50,000, a contribution margin per unit of $35, a selling price of $90, and a sales level of 4,000 units. What must be the targeted level of profit?

A) $80,000

B) $105,000

C) $140,000

D) $90,000

3. Dick Sports, Inc.'s, income statement data for last year is as follows: 

Sales revenue$200,000

Variable costs140,000

Fixed costs30,000

Operating income18,000

 What is Dick's breakeven point in dollars?

A) $100,000

B) $18,000

C) $142,000

D) $48,000

4. Excerpts from a cost-volume-profit analysis indicate fixed costs of $30,000, a variable cost per unit of $36, a selling price of $60, and a sales level of $125,000. The targeted level of profit must be

A) $20,000.

B) $50,000.

C) $95,000.

D) $75,000.