# 129. Mattress Firm produces pillow-top mattresses. Each mattress has a variable cost of \$140 and…

129. Mattress
Firm produces pillow-top mattresses. Each mattress has a variable cost of \$140
and fixed costs are \$41,000 per month. Each sells for \$360. At 420 mattresses
to be produced and sold, how much is the unit cost per mattress?
A. \$220.00
B. \$140.00
C. \$133.62
D. \$237.62

130. Breezes
Curacao has 200 rooms. Each room rents at \$130 per night and variable costs
total \$42 per room per night of occupancy. Fixed costs total \$18,700 per month.
If 70% of the rooms are occupied each of the 30 nights in June, how much will total
variable costs be for June?
A. \$546,000
B. \$369,600
C. \$176,400
D. \$252,000

131. Breezes
Curacao has 200 rooms. Each room rents at \$130 per night and variable costs
total \$42 per room per night of occupancy. Fixed costs total \$18,700 per month.
If Breezes is able to increase occupancy from 70% to 80% by how much will total
costs increase per day during the month of June?
A. \$840
B. \$2,710
C. \$1,870
D. \$1,760

132. Breezes
Curacao has 200 rooms. Each room rents at \$130 per night and variable costs
total \$42 per room per night of occupancy. Fixed costs total \$18,700 per month.
If Breezes spends an additional \$30,000 in June on advertising, it estimates it
can expect an occupancy rate of 85%. What would be the financial impact of
spending this additional money on advertising over an occupancy level of 70%
during June?
A. Net
income will increase by \$49,200
B. Net
income will increase by \$7,800
C. Total
fixed costs will increase.
D. Total
costs will increase by \$1,260

133. A
company purchases machinery costing \$50,000 in October of 2006. Five years
later they discover that a better, more efficient machine they could purchase
to replace the existing machine. The new machine will cost \$90,000 and the
company has determined that they would be able to sell the original machine for
\$30,000. In making the decision about buying the new machine, how much are
total sunk costs?
A. \$60,000
B. \$40,000
C. \$50,000
D. \$10,000

134. Rose
Wilson is entering her senior year as an accounting major and has a number of
options for her summer break. Her options for the 3 month break follow:
(1) Work
full time at a local accounting firm making \$2,200 per month.
(2) Take
a summer class which will cost \$800 and work half time making \$1,100 per month.
(3) Take
a class at a cost of \$800 and not work at all during the summer.

Roseâ€™s opportunity cost of taking the class if she
chooses option 3 over option 1 would be
A. \$6,600
B. \$800
C. \$3,000
D. More
information is needed.

135. Rose
Wilson is entering her senior year as an accounting major and has a number of
options for her summer break. Her options for the 3 month break follow:
(1) Work
full time at a local accounting firm making \$2,200 per month.
(2) Take
a summer class which will cost \$800 and work half time making \$1,100 per month.
(3) Take
a class at a cost of \$800 and not work at all during the summer.

Roseâ€™s incremental revenue if she chooses option
1 over option 2 would be
A. \$3,300

B. \$1,600
C. \$800
D. \$6,600

136. Rose
Wilson is entering her senior year as an accounting major and has a number of
options for her summer break. Her options for the 3 month break follow:
(1) Work
full time at a local accounting firm making \$2,200 per month.
(2) Take
a summer class which will cost \$800 and work half time making \$1,100 per month.
(3) Take
a class at a cost of \$800 and not work at all during the summer.
Roseâ€™s incremental profit or loss if she chooses option 2
over option 1 would be
A. (\$1,500)
B. (\$4,100)
C. (\$1,100)
D. (\$2,500)

137. Instant
Charm, Inc. sells mascara. In June, it produced and sold 10,000 tubes of
mascara. Total variable costs were \$21,000 and fixed costs totaled \$24,000. In
July, the company produced and sold 11,000 tubes of mascara. Which of the
A. Variable
costs in total will be \$21,000
B. Variable
costs per unit will be \$2.10
C. Variable
costs per unit will be \$4.50
D. Total
fixed costs will be \$26,400

138. Instant
Charm, Inc. sells mascara. In June, it produced and sold 10,000 tubes of
mascara. Total variable costs were \$21,000 and fixed costs totaled \$24,000. In
August, Instant Charm produced and sold 9,000 units. Which statement is
correct?
A. Fixed
cost per unit will be \$2.67
B. Total
fixed costs will be \$21,600
C. Variable
costs in total will be \$40,500
D. Variable
costs per unit will be \$2.33