# Variable Cost Assignment

Sunlight Design Corporation sells glass vases at a wholesale price of \$4.50 per unit. The variable cost to manufacture is \$1.75 per unit. The monthly fixed costs are \$8500. Its current sales are 29,000 units per month. If the company wants to increase its operating income by 20 %, how many additional units must it sell? (Round any intermediate calculations to two decimal places and your final answer up to the nearest whole unit.) A) 34,182 glass vases C) 8500 glass vases 9

B) 130,500 glass vases D) 5182 glass vases 10) Martin was a professional classical guitar player until a motorcycle accident left him disabled. After long months of therapy, he hired an experienced luthier and started a small shop to make and sell Spanish guitars. The guitars sell for \$900, and the fixed monthly operating costs are as follows: 10) Rent and utilities Wages and benefits to luthier Other expenses \$800 2000 474 Martin&#39;s accountant told him about contribution margin ratios, and Martin understood clearly that for every dollar of sales, 65 % went to cover his fixed costs, and anything above that point was profit. Martin wishes to earn \$4000 of operating profit each month. Calculate the number of guitars Martin will need to sell to achieve the target profit. (Round your answer up to the nearest whole guitar.) A) 4 guitars B) 3 guitars C) 12 guitars D) 13 guitars 11) Zeke was a professional classical guitar player until a motorcycle accident left him disabled. After long months of therapy, he hired an experienced luthier and started a small shop to make and sell Spanish guitars. The guitars sell for \$800, and the fixed monthly operating costs are as follows 11) Rent and utilities Wages and benefits to luthier Other expenses \$700 2300 479 Zeke&#39;s accountant told him about contribution margin ratios, and Zeke understood clearly that for every dollar of sales, 75% went to cover his fixed costs, and anything above that point was profit. Zeke wishes to earn \$5100 of operating profit each month. Calculate the amount of sales revenue required to achieve the target profit. (Round your answer to the nearest dollar.) A) \$4639 D) \$11,439 C) \$34,316 B) \$13,916 12) 12) When the sales price per unit decreases, the contribution margin per unit B) increases proportionately D) decreases A) increases C) remains the same 13) 13) Which of the following will lower the breakeven point? A) an Increase In total fixed costs C) a decrease In the sales price per unit B) an increase in the sales price per unit D) an Increase In the variable cost per unit 14) Which of the following statements is TRUE if the variable cost per unit increases while the sales price per unit and total fixed costs remain constant? A) The breakeven point increases. C) The breakeven point remains the same. 14) B) The breakeven point decreases D) The contribution margin Increases. .

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