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When comparing an income statement prepared using US GAAP rules versus a managerial contribution margin income statement……

How does a change in total fixed costs (perhaps due to a significant change in production levels) effect on the total contribution margin?  

Q154  

Which is riskier for a new company that expects sales to be very low for the first few years?   

An example of a sunk cost is:

Q200

Q150 At the breakeven point, ______________________

Indiana University is deciding whether to renovate one of two dorms (they can only choose one of the dorms).  Both dorms provide 500 rooms for students. Which of the following is relevant to the decision: A Estimated cost of paint supplies  $500  $500 B Cost to remove toxic insulation from Dorm 1. Dorm 2 does not have this insulation.  $8,000  $  0   C Roofing materials  $1,000  $800 D Architect fees  $1,500  $1,500 E Labor costs  $10,000  $10,000 F Lost dorm rental fees if the dorm is shut down during renovation   $13,000  $15,000

  Bryan Inc. makes a product that sells for $150 per unit. The company’s costs are as following: Variable manufacturing costs $60 per unit Variable selling expenses $21 per unit Total fixed manufacturing costs $100,000 allocated to 10,000 units produced Total fixed selling & administrative expenses $200,000 allocated to 10,000 units produced Calculate the contribution margin per unit.

Q149