SUPPOSE THAT THE ADAMS COMPANY SELLS A PRODUCT FOR $16. UNIT COSTS ARE AS FOLLOWS:

SUPPOSE THAT THE ADAMS COMPANY SELLS A PRODUCT FOR $16. UNIT COSTS ARE AS FOLLOWS:

DIRECT MATERIALS $3.90

DIRECT LABOR $1.40

VARIABLE OVERHEAD $2.10

VARIABLE SELLING EXPENSES $1.60

TOTAL FIXED OVERHEAD IS $52,000 PER YEAR, AND TOTAL FIXED SELLING AND ADMINISTRATIVE EXPENSES ARE $37,950. NORMAL PRODUCTION IS 13,000 UNITS PER YEAR.

REQUIRED:

MATCH A TERM FROM COLUMN A WITH THE CORRECT NUMBER BASED ON THE ABOVE INFORMATION FOR ADAMS COMPANY IN COLUMN B.

# COLUMN A COLUMN B

1 CONTRIBUTION MARGIN A. 12,850

2 CONTRIBUTION MARGIN RATIO B. 0.5625

3 VARIABLE COST RATIO C. $9.00

4 BREAK-EVEN UNITS D. 0.4375

5 PRIME COST PER UNIT E. $7.50

6 CONVERSION COST PER UNIT F. $7.00

7 VARIABLE COST PER UNIT G. $5.30

SUPPOSE THAT THE ADAMS COMPANY SELLS A PRODUCT FOR $16. UNIT COSTS ARE AS FOLLOWS: