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

• 76%

• 81%

• 66%

• 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

• 1,650 units

• 1,550 units

• 1,600 units

• 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

• $4,320

• $4,720

• $4,820

• $4,520

20. In general, a firm with higher amounts of sales on credit has

Multiple Choice

• lower needs to borrow.

• higher needs to borrow.

• more rapidly collection of credit sales.

• more ability to buy raw materials on credit.

21. A plant with high automation would generally have

Multiple Choice

• more variable than fixed costs.

• more fixed than variable costs.

• all fixed costs.

• all variable costs.

22. If the sales price per unit decreases because of competition but the cost structure remains the same

Multiple Choice

• the breakeven point rises

• the degree of combined leverage declines

• the degree of financial leverage declines

• 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

• $6.50

• $5.50

• $4.00

• $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

• 4,067 units

• 15,250 units

• 7,705 units

• 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

• more than 5,438 units

• 4,938 units

• less than 4,938 units

• Not enough information has been provided to determine the break-even point.

26. A high degree of operating leverage means

Multiple Choice

• there are high fixed costs.

• there is high debt.

• there is a large amount of equity.

• there are high labor costs.

27. Break-even analysis

Multiple Choice

• is useful to know how much changes in volume affect cost and profit.

• short-term profitability.

• does not include depreciation expense as a fixed cost when calculating the degree of financial leverage.

• All of the options are true.

28. Combined leverage is concerned with the relationship between

Multiple Choice

• EBIT and EBT.

• changes in sale and changes in EPS.

• contribution and EBIT.

• changes in EBT and net income.