The following information applies to Questions 1 and 2.DH Manufacturing produces a single product that sells for $8. Variable (flexible) costs per unit equal $3.20. The company expects the total fixed (capacity-related) costs to be $7200 for the next month at the projected sales level of 20000 units. In an attempt to improve performance management is considering a number of alternative actions. Each situation is to be evaluated separately.1. What is the current break-even point in terms of number of units for the next month1500 units2250 units3333 unitsNone of the above is correct.2. Suppose that DH Manufacturing s management believes that a $1600 increase in the monthly advertising expense will result in a considerable increase in sales. How much must sales increase in a month to justify this additional expenditure200 units334 units500 unitsNone of the above is correct.3. A favorable cost variance of significant magnitude:is the result of good planningmay lead to improved production methods if it is investigatedindicates that management does not need to be concerned about lax standardsdoes not need to be investigated4. A flexible budget contains:cost targets for actual outputcost targets for planned outputthe difference between planned and actual outputactual costs for actual output
