Jelly Company has a product that sells for $150 per unit and has variable costs of $60 per unit. What is the contribution margin per unit?

Jelly Company has a product that sells for $150 per unit and has variable costs of $60 per unit. What is the contribution margin per unit?

multiple choice

    $60
    $50
    $90 Correct
    60%

Explanation

Knowledge Check 01
 
Contribution margin per unit = Selling price per unit of $150 − Variable costs per unit of $60 = $90.
 

A cost that has a step pattern when volume changes occur outside the relevant range of operations is called a _____ cost.
 
multiple choice

    fixed
    variable
    mixed
    step-wise Correct

Explanation

Knowledge Check 01
 
A cost that has a step pattern when operating outside of the relevant range of operations is called a step-wise cost.
 

A cost that behaves like a combination of fixed and variable costs is called a _____ cost.

multiple choice

    fixed
    variable
    mixed Correct
    step-wise

Explanation

Knowledge Check 01
 
A cost that behaves like a combination of fixed and variable costs is called a mixed cost.
 

Fixed costs on a per unit basis _____ as production increases.
 
multiple choice

    increase
    decrease Correct
    stay the same

Explanation

Knowledge Check 01
 
Fixed costs in total do not change, but as shown on a graph, fixed costs on a per unit basis will decrease as production increases.
 

A cost that changes in proportion to changes in the activity output volume is called a _____ cost.
 
multiple choice

    fixed
    variable Correct
    mixed
    step-wise
    curvilinear

Explanation

Knowledge Check 01
 
A cost that changes in proportion to changes in the activity output volume is called a variable cost.

 

A cost that does not change with changes in volume of activity is called a _____ cost.

multiple choice

    fixed Correct
    variable
    mixed
    step-wise
    curvilinear

Explanation

Knowledge Check 01
 
A cost that does not change with changes in volume of activity is called a fixed cost.

Cost-volume-profit analysis is used to predict how changes in _____ levels affect profit.
 
multiple choice

    fixed and variable
    production and sales
    costs and sales Correct
    sales and production

Explanation

Knowledge Check 01
 
Cost-volume-profit analysis is used to predict how changes in cost and sales levels affect profit and requires the following four inputs: number of units sold, sales price per unit, variable cost per unit, and fixed costs.