11. A product has a selling price of $20, a contribution margin ratio of 40% and fixed costs of $120 000. To make a profit of $30 000 the number of units that must be sold is:

A. 375 000

B. 180 750

C. 18 750

D. 37 500

E. None of the above

12. Which of the following budgeted revenues has an unfavourable variance?

A. Rent $3 258, actual rent revenue $3 258.

B. Dividends $7 900, actual dividends revenue $8 300.

C. Interest $2 700, actual interest revenue $2 600.

D. Cash sales $50 000, actual cash sales $50 000.

E. Service revenue $5 980, actual service revenue $6 000.

13. From the following data calculate the estimated cash received from credit sales during the month of May. Credit sales for March, $25 000; April, $30 000; May, $18 000. Credit sales are normally settled in the following pattern: 50% in the month of sale, 40% in the month following the sale, and 10% in the second month following the sale.

A. $12 000

B. $21 000

C. $9 000

D. $127 000

E. $23 500

14. Sharpe Ltd made these estimates for the six months ending 31 December. Estimates: Cash receipts from services provided $60 000 Cash payments for expenses, including rent paid in advance ($3 000) 43 000 Purchase of equipment ($1500 will not be paid until next February) 20 000 Depreciation of equipment 4 000 Borrowings 15 000 If the cash balance at 1 July is $13 000, the estimated cash balance at 31 December is: A. surplus of $13 500.

B. surplus of $26 500.

C. surplus of $11 000.

D. deficit of $15 000.

E. deficit of $16 500.

15. Which of the following statements concerning the internal rate of return method of capital decision making is NOT correct?

A. It is used to find the rate of return of the project.

B. Its decision rule is to accept projects that have a return higher than the hurdle rate.

C. It takes into account the scale of projects.

D. The IRR is the rate of return that discounts the cash flows of a project so that the present value of the cash inflow just equals the present value of the cash outflows.

E. None of the above, i.e. all are correct statements.