Managerial accounting
Which company has the highest operating leverage? a. A Company b. B Company c. E Company d. all have the same operating leverage 16. What is the increase in E company's profit (not income) in dollar amount if the company experiences in 10% increase in sales? a. $20,000 b. $7,500 c. $2,500 d. none of the answers Answer questions 17 and 18 based on the following information: Nishino company manufactures a product whose selling price and variable cost per unit are $10 and $4 respectively and the fixed cost is $137,500. 17. What sales in $ amount that must be generated if Nishino Company desires to earn a profit of $35,000? (round to the nearest $ if necessary,) a. $175,000 b. $262,500 c. $ 287,500 d. none of the answers 18. what is the sales in units that must be generated if Nishino Company desires to earn an after-tax profit (net income) of $35,000 assuming the tax rate is 20% (round to the nearest unit if necessary) a. 16,550 units b. $27,583 units c. 30,208 units d. none of the answers 19. Higashi Company is selecting a cost driver to use in allocating utilities costs to its departments. Which of the following is not considered a characteristic to the best cost driver? a. a strong cause-and-effect relationship to the cost being allocated, c. being acceptable and reasonable to the managers of the departments. d. all are characteristics desirable in a cost driver 20. The management of Minami Pharmacy is very optimistic about the store's ability to achieve significant increases in sales in each of the next 5 years. The company will most likely benefit if the company creates a leverage cos structure. a. low b. medium c. high d. no Answer questions 21, 22 and 23 based on the following information: Ueno Company manufactures 2 products, Maxi and Mini. The relative sales mix is 25% for Maxi and 75% for The expected fixed cost is $675,000 and the per unit sales price and variable cost are follows: 21. What is the total number of units (combined of both products) that the company must sell to break-even? a. 9,000 units b. 15,000 units c. 38,000 units d. none of the answers 22. How many units of Maxi must the company sell to break-even? a. 3,000 units b. 11, 250 units c. 27,000 d. none of the answers 23. If Ueno Company changes the sales mix to 50% for Maxi and 50% for Mini without changing the total number units, which of the following statements is correct? a. The company's gross margin would increase but contribution margin would decrease. b. Total profit of the company would increase. c. Both a and b are true. d. Neither a nor b are true
