Question
2. Tynex, Inc., a manufacturing company produces 80,000 units of product A at a total cost of $2.4 million. Total fixed costs are $1.4 million.
2. Tynex, Inc., a manufacturing company produces 80,000 units of product A at a total cost of $2.4 million. Total fixed costs are $1.4 million. If the company increases production by 25% and uses a 19% markup, the price per unit will be: A) $31.54 B) $37.10 C) $30.80 D) $51.80
Use the following to answer questions 3-4: XTZ Company's market for the Model 55 has changed significantly, and XTZ has had to drop the price per unit from $265 to $125. There are some units in the work in process inventory that have costs of $150 per unit associated with them. XTZ could sell these units in their current state for $100 each. It will cost XTZ $10 per unit to complete these units so that they can be sold for $125 each. 3. A new employee looks at the analysis and exclaims, We'll lose money with either of these alternatives! Let's just throw these units in the trash! Suppose the alternative to trashing is choosing the more profitable of the two alternatives (that the new employee looked at and did not like). What effect will the trashing option (that the new employee wants) have on net income?
3. A) Net income will increase by $35 per unit for each unit discarded.
B) Net income will decrease by $115 per unit for each unit discarded.
C) It will have no effect on net income.
D) Net income will decrease by $100 per unit for each unit discarded.
4. When the incremental revenues and expenses are analyzed, the company is better off by
A) $15 per unit if they complete the units.
B) $25 per unit if they sell the units in their current state.
C) $10 per unit if they sell the units in their current state.
D) $125 per unit if they complete the units.
10. Below is a performance report that compares budgeted and actual profit of Boyles Beer for the month of April: Budget Actual Difference Sales $200,000 $202,000 $2,000 Less: Cost of ingredients $162,000 $166,000 $4,000 Salaries $31,000 $31,200 $200 Controllable Profit $47,000 $44,800 -$2,200. In evaluating the department in terms of its increase in sales and expenses, what will be most important to investigate? (A) Sales (B) Cost of ingredients (C) Salaries (D) All three components have equal importance.
12. New Insights, Inc. is looking to achieve a net income of 15 percent of sales. Heres the firms profile: Unit sales price is $10; variable cost per unit is $6; total fixed costs are $40,000. What is the level of sales in units required to achieve a net income of 15 percent of sales?
A) 12,000 units
B) 21,000 units
C) 16,000 units
D) 20,000 units
13. Unit selling price = $230; Variable cost per unit = $130; Fixed Costs = $36,000; Tax rate = 40%. How many units should Small Grill sell to achieve an after-tax target income of $6,000?
A) 200
B) 460
C) 230
D) 300
15.
Tax rate = 40%. How many units should Small Grill sell to achieve an after-tax target income of $6,000? A) 200 B) 460
C) 230 D) 300
17. JungleGym, a best-selling toy has a selling price of $15. If the contribution margin ratio is 40% and if the fixed costs are $60,000, how many JungleGyms must the company sell to realize a profit of $450,000? A) 30,000 B) 34,000 C) 85,000 D) 100,000
Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started