14) Elgin Battery Manufacturers had sales of $1,000,000 in 2015 and their cost of goods sold is $700,000. Selling and administrative expenses were $100,000. Depreciation expense was $80,000 and interest expense for the year was $10,000. The firm's tax rate is 30 percent. What is the dollar amount of taxes paid in 2015? A) $36,000 B) $117,800 C) $33,000 D) $300,000 15) Density Farms Inc, had sales of $750,000, cost of goods sold of $200,000, selling and administrative expense of $70,000, and operating profit of $150,000. What was the valuc of depreciation expense? A) $150,000 B) $230,000 C) $330,000 D) $0 16) A firm has total assets of $3,000,000 and stockholders equity is $1,000,000. What is the debt-to-total asset ratio? A) 45% B) 75% C) 55% D) 67% 17) A firm has a debt-to-total assets ratio of 60%,$300,000 in debt, and a net income of $50,000. Calculate return on equity. A) 40% B) 20% C) 25% D) There is not enough information to calculate return on equity. 18) In examining the liquidity ratios, the primary emphasis is the firm's A) ability to effectively employ its resources. B) overall debt position. C) ability to pay short-term obligations on time. D) ability to earn an adequate return of profits. 19) Which two ratios are used in the DuPont system to create return on assets? A) Return on assets and asset turnover B) Profit margin and asset turnover C) Return on total capital and profit margin D) Inventory tumover and retum on fixed assets 20) A firm's long-term assets =$100,000, total assets = $400,000, inventory =$50,000 and current liabilities = $200,000. What are the firm's current ratio and quick ratio? A) Current ratio =0.5; quick ratio =1.25 B) Current ratio =1.0; quick ratio =2.0 C) Current ratio =1.5; quick ratio =1.25 D) Current ratio =2.5; quick ratio =2.0 24) A firm has beginning inventory of 400 units at a cost of $12 each. Production during the period was 700 units at $13 each. If sales were 800 units, what is the value of the ending inventory using LIFO? A) $2,750 B) $3,600 C) $3,300 D) $3,850 25) XYZ Co. has forecasted June sales of 400 units and July sales of 700 units. The company maintains ending inventory equal to 125% of next month's sales. June beginning inventory reflects this policy. What is June's required production? A) 750 units B) 0 units C) 775 units D) 400 units 26) In using a systems approach to financial planning, it is necessary to develop a A) pro forma income statement. B) cash budget. C) production plan. D) All of the options are true. 27) Loretta \& Niece's fixed costs are $425,000, including $25,000 of depreciation expense. The price of each unit sold is $120, and the variable cost per unit is $60. How many units must the firm sell to reach the cash break-even point? A) 6,667 units B) 7,333 units C) 7,083 units D) 3,542 units 28) The degree of operating leverage may be defined as A) the percent change in operating income divided by the percent change in unit volume. B) Q(PVC) divided by Q(PVC)FC. C) S - TVC divided by S TVC - FC. D) All of the options are true 29) At the break-even point, a firm's profits are A) greater than zero. B) less than zero. C) equal to zero. D) Not enough information is given to determine. 30) Which of the following is concerned with the change in operating profit as a result of a change in unit volume? A) Financial leverage B) Break-even point C) Operating leverage D) Combined leverage