Question

21. An assumption of the cost-volume-profit analysis is:

to. The unit selling price remains constant throughout the relevant range.

b. The total fixed cost remains constant throughout the relevance interval.

c. No inventory or no change in inventory quantity.

d. All of the above

22. If the unit sale price is $ 50, the unit variable cost is $ 20, the total fixed cost is $ 300,000, and the tax rate is 25%, the breakeven point is:

to. 6,000 units

b. 13,334 units

c. 15,000 units

d. 10,000 units

23. If the unit variable cost is equal to 45% of the unit sales price, the total fixed cost is equal to $ 275,000 and the tax rate is 25%, the tie point is:

to. $ 500,000

b. $ 666.667

c. $ 604,396

d. More information is needed.

24. Suppose the unit sales price is $ 40, the unit variable cost is $ 18, the total fixed cost is $ 110,000, and the tax rate is 25%. The number of units that need to be sold for a net profit of $ 66,000 is:

to. 7,546

b. 9,000

c. 11,000

d. 5,000

Answer 1

Q21.
Answer is d. All of the above.
Q22.
Answer is d. 10,000 units
explanation:
Unit contribution = 50-20 = 30
Total Fixed cost		300000
Divide: Unit contribution	30
Break even point		10000
Q23.
Answer is a. $ 500,000
Explanation:
Total fixed cost		275000
Divide: CM ratio		55%
Tie point			500000
Q24.
Answer is b. 9000
Explanation
Target income			66000
Before tax Net Income (66000/75%)	88000
Add: Fixed cost			110000
Target contribution			198000
Divide: CM per unit (40-18)		22
Sales units required			9000