Multiple Choice Questions 
1. Lara Company's budget includes the following credit sales for the current year: September, $25,000; October, $36,000; November, $30,000; December, $32,000. Experience has shown that payment for the credit sales is received as follows: 15% in the month of sale, 60% in the first month after sale, 20% in the second month after sale, and 5% is uncollectible. How much cash can Lara Company expect to collect in November as a result of current and past credit sales? 
A. $19,700.B. $28,500.C. $30,000.D. $31,100.E. $33,900.
2. Brown Company's contribution margin ratio is 24%. Total fixed costs are $84,000. What is Brown's break-even point in sales dollars? 
A. $20,160.B. $110,526.C. $350,000.D. $240,000.E. $84,000.
3. Selected current year company information follows:
Net income .................. $ 15,953
Net sales ................... 712,855
Total liabilities, beginning-year .......... 83,932
Total liabilities, end-of-year............. 103,201
Total stockholders€™ equity, beginning-year........ 198,935
Total stockholders€™ equity, end-of-year.......... 121,851

The total asset turnover is: 
A. 2.24 timesB. 2.81 timesC. 3.64 timesD. 4.67 timesE. 6.28 times
4. Winthrop Manufacturing produces a product that sells for $50.00. Fixed costs are $260,000 and variable costs are $24.00 per unit. Winthrop can buy a new production machine that will increase fixed costs by $11,400 per year, but will decrease variable costs by $3.50 per unit. Compute the contribution margin per unit if the machine is purchased. 
A. $22.50.B. $26.00.C. $29.50.D. $28.50.E. $27.50.
 5. A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 pretax income, how many units must be sold? A. 6,500.B. 6,000.C. 500.D. 5,000.E. 5,500.
 6. A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. What is the break-even point in dollar sales? 
A. $2,100.B. $6,000.C. $420,000.D. $646,154.E. $1,200,000. 
7. Bentels Co. desires a December 31 ending inventory of 2,840 units. Budgeted sales for December are 4,000 units. The November 30 inventory was 1,800 units. Budgeted purchases are: A. 5,040 units.
B. 1,240 units.
C. 6,840 units.
D. 4,000 units.
E. 5,800 units.
8. The following information is available for the year ended December 31:
Beginning raw material inventory ........ $2,500
Raw material purchases ............ 4,000
Ending raw material inventory .......... 3,000
Office supplies expense .............. 1,000
The amount of raw materials used in production for the year is: 
A. $4,100.B. $5,100.C. $3,500.D. $6,500.E. $4,000.
9. Use the following information to determine the ending cash balance to be reported on the month ended June 30 cash budget.
a. Beginning cash balance on June 1, $94,000.
b. Cash receipts from sales, $413,000.
c. Budgeted cash disbursements for purchases, $268,000.
d. Budgeted cash disbursements for salaries, $95,000.
e. Other budgeted expenses, $57,000.
f. Cash repayment of bank loan, $32,000.
g. Budgeted depreciation expense, $34,000. 
A. $55,000.B. $21,000.C. $87,000.D. $112,000.E. $78,000.
10. Refer to the following selected financial information from Fennie's, LLC. Compute the company's current ratio for Year2.

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Year ear I Cash Short-term investments Accounts receivable, net Merchandise inventory Prepaid expenses Plant assets Accounts payable Net sales Cost of goods sold $37,500 90,000 85.500 121.000 12,100 388.000 113.400 711.000 390,000 $32.250 60.000 79,500 125,000 9,700 338.000 107.800 676,000 375.000