# 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

follow is correct?

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