1. Will Ferrell Corporation, a company that produces and sells a single product, has provided its contribution format income statement for March. Sales (5000 units) 205000 Variable expenses 125000 Contribution Margin 80000 Fixed Expenses 62400 Net Operating Income 17600 If the company sells 20,000 units, its net operating income should be closest to: A. $84,000 B. $237,600 C. $257,600 D. $119,008

2. Garth Corporation sells a single product. If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change, then: Contribution margin per unit Contribution margin ratio Break-even in units A. Increases Increases Decreases B. No change No Change No Change C. No change Increases No Change D. Increases No Change Decreases 3. All of Porter Corporation's sales are on account. Sixty percent of the credit sales are collected in the month of sale, 25% in the month following sale, and 10% in the second month following sale. The remainder are uncollectible. The following are budgeted sales data for the company: Jan. Feb. Mar. Apr. Total Sales 400000 600000 500000 700000 Cash receipts in April are expected to be: A. $605,000 B. $420,000 C. $185,000 D. $545,000 4. Reynold Enterprises sells a single product for $25. The variable expense per unit is $15 and the fixed expense per unit is $5 at the current level of sales. The company's net operating income will increase by $5 if one more unit is sold. True False 5. Which of the following is NOT an objective of the budgeting process? A. To communicate management's plans throughout the entire organization. B. To ensure that the company continues to grow. C. To uncover potential bottlenecks before they occur. D. To provide a means of allocating resources to those parts of the organization where they can be used most effectively