5_Consider the following data: fixed costs = $10 million, variable cost per unit = $400, and revenue per unit = $1,200. For this organization, which of the following statements is most correct?

A) Higher volume leads to higher total costs. B)Higher volume leads to higher average costs. C) Higher volume leads to a higher variable cost per unit. D)Higher volume leads to a higher contribution margin per unit. E)None of the above is correct.

7_ Assume the local Children's Hospital implements an outpatient asthma intervention to improve the health outcomes of children with asthma. As a result, the hospital sees a dramatic reduction in the number of inpatient admissions for children with asthma but little change in the total cost of operating the hospital. Which of the following statements describes the most likely reason for the lack of cost savings? A)The hospital's cost structure primarily consists of variable costs. B) The hospital's cost structure primarily consists of fixed costs. C) The hospital's cost structure consists of an equal mix of variable and fixed costs. D) The hospital reduced its capacity (i.e., downsized) following the drop in admissions. E)The hospital has a high variable cost per admission.

8_ Seattle Grace Hospital plans to invest in a new piece of CT imaging equipment. The hospital estimates that it can bill $1,500 per scan. Preliminary market assessments indicate that demand will be fewer than 5,000 scans per year. The hospital is considering a scanner (scanner B) that will result in total fixed costs of $800,000 per year and would yield a profit of $450,000 per year if the hospital produced and billed for 5,000 scans. What is the estimated breakeven volume for scanner B (in number of scans)? A)3,200 B)160 C)834 D)5,000 E)250

10_ Smith Pharmaceuticals is trying to estimate the breakeven volume of sales on a newly developed drug. Which of the following would be expected to reduce the number of pills Smith would need to sell to breakeven (i.e., which would result in a lower breakeven volume) if we assume everything else remains the same? A)An increase in total fixed costs B)A decrease in the selling price per pill C)An increase in the variable cost per pill D)An increase in the unit contribution margin E)An increase in allocated overhead (indirect) costs