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1
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Smith wants to sell its unit with a mark-up of 60% of their product cost. What is the recommended selling price?
A)$ 38.40
B)$ 43.20
C)$518.40
D)Unable to determine based upon the information provided.
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At a selling price of $48, how many units does Smith need to sell in order to generate a profit of $60,000?
A)3,125
B)4,375
C)10,000
D)10,001
3
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ABC is discussing a new advertising campaign that would cost $50,000. What level of sales dollars is required for ABC to break-even without the new advertising campaign?
A)$400,000
B)$933,334
C)$500,000
D)$480,000
4
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ABC wants to have a minimum net income of $40,000. The current level of Sales is based upon 10,000 units. What level of sales is required to achieve this level of net income?
A)$544,000
B)$933,334
C)$973,334
D)$1,040,000
5
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If ABC Sales can decrease variable costs 10%, what is the breakeven point in sales dollars?
A)$452,830
B)$440,000
C)$432,000
D)$360,000
6
Which of the following is not a limiting factor of cost-volume-profit analysis?
A)The process assumes a linear relationship among the variables.
B)The process assumes variable costs per unit are available.
C)Within the relevant range of operating activity, efficiency is assumed to be constant.
D)Inventory levels are assumed to not change during the period.
7
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What sales price per plant does Violet need to begin making a profit if she sells the estimated monthly amount of plants?
A)$7.51
B)$7.50
C)$5.00
D)$2.50
8
Violet Flowers expects to sell 3,000 plants a month. She estimated the following monthly costs:
Variable Costs$ 9,000
Fixed Costs$15,000

During her second month of operation, Violet would like to earn $2,000 selling plants with ribbons at $8 each. How many plants does she have to sell?
A)3,091
B)3,090
C)3,400
D)3,600
9
Violet Flowers expects to sell 3,000 plants a month. She estimated the following monthly costs:
Variable Costs$ 9,000
Fixed Costs$15,000

Violet predicts plant sales will increase if she advertises in the local paper. If she spends $1,600 running ads in the Sunday paper for the next four weeks, how many plants does she have to sell at $8 each and to earn $2,000?
A)3,400 units
B)3,382 units
C)3,391 units
D)3,720 units
10
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The break-even point is approximately equal to:
A)$150,000 in total sales
B)$70,000 in total sales
C)4,000 units
D)2,000 units
11
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In her first month of operations, Violet sold 3,000 plants for $24,000. In the second month, Violet increased advertising by $1,800, which increased total sales to $28,000. What is her margin of safety?
A)10%
B)12%
C)18%
D)22%
12
Violet determined that there is a market for Bonsai plants in her county. During initial planning, she estimated that she could sell Bonsai plants for $35 each. She estimated additional lights and fixtures to properly display these items would cost $2,000. The displays will hold between 500 to 1,000 Bonsai (total annually). Violet wanted to earn $5,000 profit from her Bonsai venture. The plants will cost Violet $26.25 each.
Violet now believes she can only sell 600 Bonsai instead of the 800 that she originally planned. What should Violet sell each Bonsai for to make a $5,000 profit?
A)$37.92
B)$38.50
C)$41.22
D)$45.00
13
Violet can purchase beautiful "antique" pots for her Bonsai plants. Since these pots are unique, durable and beautiful, she is thinking of doubling her usual price for Bonsai when held in these pots. Such a pricing strategy is called:
A)Prestige pricing
B)Target pricing
C)Cost plus pricing
D)Premium pricing
14
The margin of safety:
A)Measures the difference between fixed cost and desired profit.
B)Measures the difference between sales price and fixed costs.
C)Measures the amount which budgeted costs exceed actual costs.
D)Measures the cushion between budgeted sales and breakeven sales.
15
A break-even graph:
A)Depicts the differences from actual sales and budgeted sales.
B)Depicts cost-volume-profit relationships.
C)Depicts the differences between budgeted costs and actual costs.
D)Depicts between budgeted sales and breakeven sales.







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