Question
1. Electric Jet Skis operates a jet ski rental business. Assume the jet skis rent for $55 for 6 hours. The variable costs are $33
1.Electric Jet Skis operates a jet ski rental business. Assume the jet skis rent for $55 for 6 hours. The variable costs are $33 per 6 hour rental, and its fixed costs are $80,000 each month. What is the contribution margin per 6 hour jet ski rental?
a. $33.00
b. $0.40
c. $22.00
d. $2.50
2. LaComedia Dinner Theater sells tickets for dinner and a show for $40 each. The cost of providing dinner is $26 per ticket and the fixed cost of operating the theater is $100,000 per month. The company can accommodate 12,000 patrons each month. What is the contribution margin ratio?
a. 65%
b. 35%
c. 14%
d. 286%
5. A product is sold at $60.00 per unit, the variable expense per unit is $30, and total fixed expenses are $200,000, what are the breakeven sales in dollars?
a. $3,333
b. $100,000
c. $133,333
d. $400,000
15. Neeley Grocery has a monthly target operating income of $25,000. Variable expenses are 20% of sales and monthly fixed expenses are $15,000. What is the monthly margin of safety as a percentage of target sales in dollars?
a. 137.50%
b. 62.50%
c. 80.00%
d. 166.67%
20. SportSupplies Corporation has budgeted purchases of inventory for December of $140,000. Expected beginning inventory on December 1 and ending inventory on December 31 are $90,000 and $120,000, respectively. If cost of goods sold averages 88% of sales, what are budgeted sales for December?
a. $125,000
b. $96,800
c. $193,182
d. $397,727
22. A lamp store purchased $3,800 of lamps in September. The store had $1,600 of lamps on hand at the beginning of September, and expected to have $1,300 of lamps at the end of September to cover part of anticipated October sales. What is the budgeted cost of goods sold for September?
a. $5,400
b. $4,100
c. $6,700
d. $3,500
26. Expected purchases for June and July are $80,000 and $92,000, respectively. Purchases for May were $60,000. All purchases are paid 45% in the month of purchase and 55% the following month. At what amount are June payments for purchases budgeted?
a. $69,000
b. $71,000
c. $86,600
d. $110,400
27. Lakewood Jet Skis has budgeted sales for June and July at $420,000 and $480,000, respectively. Sales are 75% credit, of which 40% is collected in the month of sale and 60% is collected in the following month. What is the accounts receivable balance on July 31?
a. $189,000
b. $288,000
c. $216,000
d. $360,000
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