Question
17. A firm has total assets of $1,970,000 and stockholders equity is $675,000. What is the debt to total asset ratio? (Round your answer to
17. A firm has total assets of $1,970,000 and stockholders equity is $675,000. What is the debt to total asset ratio? (Round your answer to the nearest whole percent.)
Multiple Choice
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76%
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81%
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66%
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None of the items
18. XYZ Co. has forecasted June sales of 400 units and July sales of 1,400 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?
Multiple Choice
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1,650 units
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1,550 units
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1,600 units
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1,800 units
19. A firm has beginning inventory of 300 units at a cost of $9 each. Production during the period was 710 units at $14 each. If sales were 430 units, what is the cost of goods sold (assume FIFO)?
Multiple Choice
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$4,320
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$4,720
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$4,820
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$4,520
20. In general, a firm with higher amounts of sales on credit has
Multiple Choice
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lower needs to borrow.
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higher needs to borrow.
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more rapidly collection of credit sales.
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more ability to buy raw materials on credit.
21. A plant with high automation would generally have
Multiple Choice
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more variable than fixed costs.
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more fixed than variable costs.
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all fixed costs.
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all variable costs.
22. If the sales price per unit decreases because of competition but the cost structure remains the same
Multiple Choice
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the breakeven point rises
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the degree of combined leverage declines
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the degree of financial leverage declines
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All of the options are true.
23. If a firm has fixed costs of $49,000, a price of $7.50, and a breakeven point of 24,500 units, the variable cost per unit is:
Multiple Choice
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$6.50
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$5.50
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$4.00
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$7.50
24. If a firm has fixed costs of $61,000, a variable cost per unit of $4 and sales price per unit of $15, what is the firms breakeven point in units?
Multiple Choice
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4,067 units
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15,250 units
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7,705 units
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5,545 units
25.Davison Toaster Corp. sells its products for $60 per unit. It has the following costs:
Rent | $ | 100,000 | ||
Factory labor | $ | 11 | per unit | |
Executive salaries | $ | 110,000 | ||
Raw materials | $ | 2 | per unit | |
The break-even point is
Multiple Choice
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more than 5,438 units
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4,938 units
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less than 4,938 units
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Not enough information has been provided to determine the break-even point.
26. A high degree of operating leverage means
Multiple Choice
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there are high fixed costs.
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there is high debt.
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there is a large amount of equity.
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there are high labor costs.
27. Break-even analysis
Multiple Choice
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is useful to know how much changes in volume affect cost and profit.
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short-term profitability.
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does not include depreciation expense as a fixed cost when calculating the degree of financial leverage.
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All of the options are true.
28. Combined leverage is concerned with the relationship between
Multiple Choice
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EBIT and EBT.
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changes in sale and changes in EPS.
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contribution and EBIT.
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changes in EBT and net income.
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