4.

A company currently sells products Aye, Bee, and Cee in equal quantities and at the same selling price per unit. The contribution margin ratio for product Aye is 40%, for product Bee is 50%, and the overall contribution margin ratio for the company is 48%. Suppose that the sales mix changes to 40% Aye, 25% Bee, and 35% Cee, what would be the new overall contribution margin ratio for the company?

Select one:

a. 47.4%

b. 45.3%

c. 27.5%

d. 68.4%

5.

Walton Manufacturing Company gathered the following data for the month.

Cost of goods sold ............................. $35,000

Sales ......................................................... $89,000

Selling expenses .................................. $16,000

Administrative expenses .................. $21,000

How much net operating income will be reported for the period?

Select one:

a. $17,000

b. Cannot be determined

c. $52,000

d. $54,000

6.

Each of the following would be classified as variable in terms of cost behavior except:

Select one:

a. sales commissions.

b. cost of shipping goods to customers via express mail.

c. direct materials.

d. plant manager's salary.

7.

he linear equation Y = a + bX is often used to express cost formulas. In this equation:

Select one:

a. the Y term represents total fixed cost.

b. the a term represents variable cost in total.

c. the X term represents total cost.

d. the b term represents variable cost per unit of activity.

8.

Geneva Steel Corporation produces large sheets of heavy gauge steel. The company showed the following amounts relating to its production for the year just completed:

Direct materials used in production ..................... $110,000

Direct labor costs for the year ................................ $55,000

Work in process, beginning ..................................... $22,000

Finished goods, beginning ....................................... $45,000

Cost of goods available for sale ............................ $288,000

Cost of goods sold ....................................................... $238,000

Work in process, ending ............................................ $16,000

The balance of the finished goods inventory at the end of the year was:

Select one:

a. $50,000

b. $95,000

c. $193,000

d. $45,000