Kuhner Corporation Produces and Sells Two Products

question 128

Multiple Choice

Kuhner Corporation produces and sells two products. Data concerning those products for the most recent month appear below: Fixed expenses for the entire company were $33,100.
-If the sales mix were to shift toward Product B64P with total dollar sales remaining constant,the overall break-even point for the entire company:

• A)would not change.
• B)would decrease.
• C)would increase.
• D)could increase or decrease.

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Definitions:

Variable Costing

A costing method that includes only variable costs—direct materials, direct labor, and variable manufacturing overhead—in the cost of a product.

Fixed Manufacturing Overhead

Costs that do not vary with the level of production or sales, such as rent, salaries of permanent staff, and equipment depreciation.

Product Cost

The total cost associated with producing goods, including raw materials, labor, and overhead costs.

Variable Costing

A costing method that includes only variable manufacturing costs—direct materials, direct labor, and variable manufacturing overhead—in unit product costs.