Cedar Company reports the following operating results for the month of June: Sales(5,000 units at $60 per unit), $300,000; variable costs ($36 per unit) $180,000; andtotal fixed costs $100,000. To increase net income, management is consideringreducing the selling price by 10%, with no changes to unit variable costs or fixedcosts. Management is confident that this change will increase unit sales by 25%.Management shouldA)implement the reduction in selling price because total sales increase to$337,500B)not implement the reduction in selling price because total contributionmargin decreases to $112,500C)not implement the reduction in selling price because operating incomedecreases to $12,500OD) both B and CE) none of the above Consider the break-even number of students for a noncredit course in pottery. Thecourse tuition is $500. The variable costs per student are pottery supplies of $300and enrollment costs of $20. The fixed costs for the course are instructor's salary of$3,000 and rental cost of the classroom of $1,500. The break-even point isstudents.A) 15B) 25C) 35D) 45E) none of the above

MARGINAL COSTING INCOME STATEMENTMarginal Costing Income Statement is One of the Important Cost…

Answered: Cedar Company reports the following…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Professional University teaches a large range of undergraduate courses. It is interested in determining the cost equation for the facilities cost as a function of student credit hours so that it an more accurately budget its facilities costs as enrollment grows. Information for the high and low cost semesters and volumes for last 5 years appears below Semester Student Cresit Hours Facilities Cost Spring 2007 250,000 $500,000 Fall 2004 300,000 $530,000 Using the high low method, with student credit hours as the activity driver, wht is the equation for facilities cost (FC) as a function of student credit hours?
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