Question

1. A company can sell all the units it can produce of either Product A or Product B but not both. Product A has a unit contribution margin of $8 and takes two machine hours to make and Product B has a unit contribution margin of $18.0 and takes three machine hours to make. If there are 5000 machine hours available to manufacture a product, income will be

$10000 more if Product A is made.

$10000 less if Product B is made.

$10000 less if Product A is made.

the same if either product is made.

2. Vaughn Manufacturing sells two types of computer hard drives. The sales mix is 30% (Q-Drive) and 70% (Q-Drive Plus). Q-Drive has variable costs per unit of $150 and a selling price of $210. Q-Drive Plus has variable costs per unit of $165 and a selling price of $255. Vaughn’s fixed costs are $1215000. How many units of Q-Drive would be sold at the break-even point?

4500.

6075.

15000.

10500.

Answer 1