University Of Arizona ATMO 005 Quiz 7 1)Contribution margin equals ___________________________

University Of Arizona

ATMO 005

Quiz 7

1)Contribution margin equals ___________________________.

Sales – rent expense

Sales – variable costs

Sales – fixed costs

Variable costs + fixed costs Sales

2. GE-H Corporation had these costs to produce 3,500 units: (a) direct materials $4,000, (b) factory rent $6,000, (c) fixed advertising $8,000, (d) factory worker wages $12,800 and (e) factory utilities

$500. What was the company’s variable cost per unit?

$8.94

$6.37

$4.94    

$4.00

$3.66

3. At some point, period costs will appear on a company’s balance sheet

income statement

both of the above

none of the above

4. Total variable costs______________________

increase as volume increases.

 decrease as volume increases.

stay the same as volume increases.

5. For this question start with the “Current State” contribution margin model that we prepared for your virtual company (i.e. class section in Lemonade Tycoon) in the class notes. Next, if your volume increased by 7 units, what would your projected net income be?