WGU D101: Comprehensive Guide to Managerial Accounting
(Chapter 6)
As a company's fixed costs decrease in relation to its variable costs, its operating leverage will
behave in no predictable manner.
increase.
decrease.
stay the same. - correct answer ✔✔decrease.
Carlton can hire only two full-time employees, but he needs even more help to make the two products
he sells. Product Alpha has a contribution margin per unit of limited resource of $750 and a unit
contribution margin of $600. Product Beta has a contribution margin per unit of limited resource of $975
and a unit contribution margin of $400. Carlton thinks he will be able to afford hiring an extra employee
to work 150 hours per month, but he is unsure which product to have the employee work on. Which
product would result in the highest additional contribution margin?
Product Beta, which would provide additional contribution margin of $146,250.
Product Alpha, which would provide additional contribution margin of $90,000.
Product Alpha, which would provide additional contribution margin of $112,500.
Product Beta, which would provide additional contribution margin of $60,000. - correct answer
✔✔Product Beta, which would provide additional contribution margin of $146,250.
Bella's Beauties sells vacuums and shampooers. The vacuums have a unit selling price of $60 and unit
variable costs of $20. The shampooers have a unit selling price of $100 and unit variable costs of $60.
The fixed costs for the store are $80,000. The shampooers make up 1,200 of the units sold, while the
vacuums make up 2,800 of the units sold. What is Bella's break-even point in units?
2,000 units
600 units
4,000 units
1,400 units - correct answer ✔✔2,000 units
, Mike's Yogurt sells frozen yogurt by the ounce for $1.50 per ounce. The unit variable cost is currently
$0.30. The fixed costs are $1,500 per month. Calculate the contribution margin if Mike sells 500 ounces
and only the unit variable cost increases by 20%.
$570
$150
$750
$600 - correct answer ✔✔$570
Ned needs to produce more of his two products in order to increase his net income and has found a way
to increase the limited resource, machine hours. He has two products, hammers and screwdrivers.. The
hammers have a contribution margin per unit of limited resource of $300 and a unit contribution margin
of $150. The screwdrivers have a contribution margin per unit of limited resource of $280 and a unit
contribution margin of $170. Ned can dedicate an additional 120 machine hours to production this
month. Which product should he give the extra 120 hours to?
The hammers, because they provide additional contribution margin of $36,000.
The screwdrivers, because they provide additional contribution margin of $20,400.
The hammers, because they provide additional contribution margin of $18,000.
The screwdrivers, because they provide additional contribution margin of $33,600. - correct answer
✔✔The hammers, because they provide additional contribution margin of $36,000.
Advance Inc. manufactures beach umbrellas and reclining beach chairs. Due to unseasonably warm
weather, Advance received a large order for 400 umbrellas and 2,200 chairs. Each umbrella sells for $48,
and each chair sells for $60. The umbrellas require 1 machine hour to manufacture, and the chairs
require 1.5 hours. The unit variable cost for umbrellas is $18, and the unit variable cost for chairs is $24.
Advance has 1,225 machine hours available this month. How many of each product should the company
make this month to maximize contribution margin?
100 umbrellas and 408 chairs.
400 umbrellas and 550 chairs.
45 umbrellas and no chairs.
817 chairs and no umbrellas. - correct answer ✔✔400 umbrellas and 550 chairs.
Heather Company has more demand than it can meet for both of its products, Deluxe and Supreme.
Deluxe has a unit contribution margin of $57.60 and requires two machine hours to make, and Supreme
(Chapter 6)
As a company's fixed costs decrease in relation to its variable costs, its operating leverage will
behave in no predictable manner.
increase.
decrease.
stay the same. - correct answer ✔✔decrease.
Carlton can hire only two full-time employees, but he needs even more help to make the two products
he sells. Product Alpha has a contribution margin per unit of limited resource of $750 and a unit
contribution margin of $600. Product Beta has a contribution margin per unit of limited resource of $975
and a unit contribution margin of $400. Carlton thinks he will be able to afford hiring an extra employee
to work 150 hours per month, but he is unsure which product to have the employee work on. Which
product would result in the highest additional contribution margin?
Product Beta, which would provide additional contribution margin of $146,250.
Product Alpha, which would provide additional contribution margin of $90,000.
Product Alpha, which would provide additional contribution margin of $112,500.
Product Beta, which would provide additional contribution margin of $60,000. - correct answer
✔✔Product Beta, which would provide additional contribution margin of $146,250.
Bella's Beauties sells vacuums and shampooers. The vacuums have a unit selling price of $60 and unit
variable costs of $20. The shampooers have a unit selling price of $100 and unit variable costs of $60.
The fixed costs for the store are $80,000. The shampooers make up 1,200 of the units sold, while the
vacuums make up 2,800 of the units sold. What is Bella's break-even point in units?
2,000 units
600 units
4,000 units
1,400 units - correct answer ✔✔2,000 units
, Mike's Yogurt sells frozen yogurt by the ounce for $1.50 per ounce. The unit variable cost is currently
$0.30. The fixed costs are $1,500 per month. Calculate the contribution margin if Mike sells 500 ounces
and only the unit variable cost increases by 20%.
$570
$150
$750
$600 - correct answer ✔✔$570
Ned needs to produce more of his two products in order to increase his net income and has found a way
to increase the limited resource, machine hours. He has two products, hammers and screwdrivers.. The
hammers have a contribution margin per unit of limited resource of $300 and a unit contribution margin
of $150. The screwdrivers have a contribution margin per unit of limited resource of $280 and a unit
contribution margin of $170. Ned can dedicate an additional 120 machine hours to production this
month. Which product should he give the extra 120 hours to?
The hammers, because they provide additional contribution margin of $36,000.
The screwdrivers, because they provide additional contribution margin of $20,400.
The hammers, because they provide additional contribution margin of $18,000.
The screwdrivers, because they provide additional contribution margin of $33,600. - correct answer
✔✔The hammers, because they provide additional contribution margin of $36,000.
Advance Inc. manufactures beach umbrellas and reclining beach chairs. Due to unseasonably warm
weather, Advance received a large order for 400 umbrellas and 2,200 chairs. Each umbrella sells for $48,
and each chair sells for $60. The umbrellas require 1 machine hour to manufacture, and the chairs
require 1.5 hours. The unit variable cost for umbrellas is $18, and the unit variable cost for chairs is $24.
Advance has 1,225 machine hours available this month. How many of each product should the company
make this month to maximize contribution margin?
100 umbrellas and 408 chairs.
400 umbrellas and 550 chairs.
45 umbrellas and no chairs.
817 chairs and no umbrellas. - correct answer ✔✔400 umbrellas and 550 chairs.
Heather Company has more demand than it can meet for both of its products, Deluxe and Supreme.
Deluxe has a unit contribution margin of $57.60 and requires two machine hours to make, and Supreme
