_____ Sanderson sells a single product for $50 that has a variable cost of $30. Fixed costs amount to $5 per unit when anticipated sales targets are met. If the company sells one unit in excess of its break-even volume, profit will be:
D. an amount that cannot be derived based on the information presented.
E. an amount other than those in choices “A,” “B,” and “C”, but one that can be derived based on the information presented.
_____ The difference between budgeted sales revenue and break-even sales revenue is the:
A. contribution margin.
B. contribution-margin ratio.
C. safety margin.
D. target net profit.
E. operating leverage
_____ At a volume of 20,000 units, Dries reported sales revenues of $1,000,000, variable costs of $300,000, and fixed costs of $260,000. The company’s contribution margin per unit is:
E. an amount other than those above.
_____ The contribution-margin ratio is:
A. the difference between the selling price and the variable cost per unit.
B. fixed cost per unit divided by variable cost per unit.
C. variable cost per unit divided by the selling price.
D. unit contribution margin divided by the selling price.
E. unit contribution margin divided by fixed cost per unit.
_____ Which of the following does not typically appear on a contribution income statement?
A. Net income.
B. Gross margin.
C. Contribution margin.
D. Total variable costs.
E. Total fixed costs.