ACCOUNTING 311-TEST 3 CHAPTERS S AND 6 Name: Date: _:/9-r 1, How much sales are required to earn a target net income of $200,000 if total fixed coss are $250,000 and the contribution margin ratio is 40%? A) $1,125,000 B) $1,012,500 C) $500,000 D) $625,000 2. Danny's L.awn Equipment has actual sales of $800,000 and a break-even point of S520,000. How much is its margin of safety ratio? A) 46% B) 65% C)54% D) 35% 3. Fixed costs are S90,000 and the variable costs are 75% of the unit selling price. What is the break-even point in dollars? A) $1.200,000 B) $2.700,000 C) $2.100,000 D) $3,600,000 4. Boswell company reported the following information for the current year: Sales (50,000 units) $1,000,000, direct materials and direct labor $500,000, other variable costs S50,000, and fixed costs $360,000. What is Boswell's contribution margin ratio? A) 55% B) 32%. C) 45%. D)68%. 5. Gribble Company's high and low level of activity last year was 60,000 units of product produced in May and 20,000 units produced in November. Machine maintenance costs were $156,000 in May and S60,000 in November. Using the high-low method determine an estimate of total maintenance cost for a month in which production is expected to be 45,000 units. A) $117,000 B) $135,000 C) $144,000 D) $120,000 Version 2 Page