A jeans maker is designing a new line of jeans. These jeans will sell for $410 per unit and cost $328 per unit in variable costs to make. Fixed costs total $120,000. Contribution margin per unit is:

 An important tool in predicting how changes in costs and sales levels affect profit is:
Multiple Choice
•    
Target income analysis.
•    
Cost-volume-profit analysis.
•    
Least-squares regression analysis.
•    
Variance analysis.
•    
Process costing.

Answer

Cost-volume-profit analysis

A jeans maker is designing a new line of jeans. These jeans will sell for $410 per unit and cost $328 per unit in variable costs to make. Fixed costs total $120,000. Contribution margin per unit is:
Multiple Choice
•     $52.
•     $62.
•     $72.
•     $82.
•     $92. 

Answer

$82 

Explanation

410-328 = 82

Cost-volume-profit analysis is based on necessary assumptions. Which of the following is not one of these assumptions?
Multiple Choice
•     Costs can be classified as variable or fixed.
•     Inventory levels are never constant.
•     Units produced are sold.
•     Costs are linear within the relevant range.
•     Sales mix is constant. 

Answer

 Inventory levels are never constant.

A cost that changes in total in proportion to changes in volume of activity is a(n):
Multiple Choice
•    
Differential cost.
•    
Fixed cost.
•    
Incremental cost.
•    
Variable cost.
•    
Product cost.

Answer

Variable cost.

A cost that remains unchanged in total despite variations in volume of activity within a relevant range is a:
Multiple Choice
•    
Fixed cost.
•     Composite cost.
•    
Variable cost.
•    
Step-wise cost.
•    
Standard cost.

Answer

Fixed cost

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