Question 1
A pen manufacturer makes luxury pens. The pen case costs $7.26 each, the ink holder costs $1.26 each, the spring costs $.07 each and the velvet pen case costs $0.91 each. The plant has general and administrative costs of $55 000 and fixed selling expenses of $37 500. The pens sell of $39.95 each. Plant capacity is 4 000 pens per period. At what percentage of capacity is the break-even point?
◦ 30.79%
◦ 75.95%
◦ 75.77%
◦ 61.32%
◦ 73.74%
Question 2
A local health care facility has fixed costs per month of $187 400. They also have patient costs of $4.15 per day per patient for linen and cleaning, medication costs are $23.32 per patient per day and lab tests cost $75.61 per patient per day. The government is considering allowing the health care facility to charge each patient and amount to recover his or her costs and to make a "profit" of $15 000 per month. The health care facility averages 690 patients per month. The VP-Finance for the facility wants you to calculate the daily rate charge per patient. Your answer is:
◦ $462.92
◦ $396.41
◦ $455.21
◦ $284.51
◦ $345.73
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