Question
Please help me with my homework :( I don't understand the solutions no matter how hard I review!! :( 9. Carbert Corporation has provided the
Please help me with my homework :( I don't understand the solutions no matter how hard I review!! :( 9. Carbert Corporation has provided the following production and average cost data for two levels of monthly production volume. The company produces a single product. The best estimate of the total cost to manufacture 4,300 units is closest to: A. $899,345 B. $951,160 C. $847,530 D. $915,010
10. The cost of goods sold in a retail store totaled $325,000. Fixed selling and administrative expenses totaled $115,000 and variable selling and administrative expenses were $210,000. If the store's contribution margin totaled $590,000, then sales must have been: A. $1,125,000 B. $1,030,000 C. $915,000 D. $650,000
11. Last year, Black Company reported sales of $640,000, a contribution margin of $160,000, and a net loss of $40,000. Based on this information, the break-even point was: A. $640,000 B. $480,000 C. $800,000 D. $960,000
12. The following is last month's contribution format income statement of Mercury Corp. What is the company's break-even in unit sales? A. 0 units B. 12,000 units C. 6,000 units D. 8,000 units
13. Harist Corporation sold 5,000 units in May. Sales were $400,000, variable expenses were $240,000, and fixed expenses were $120,000. If the company increases its selling price by 10%, how many units would have to be sold in June to generate a profit of $40,000? A. 4,200 B. 4,500 C. 4,000 D. 5,000
14. Data concerning Samson Corporation's single product appear below: Fixed expenses are $445,000 per month. The company is currently selling 6,000 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $9 per unit. In exchange, the sales staff would accept a decrease in their salaries of $43,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 100 units. What should be the overall effect on the company's monthly net operating income of this change? A. decrease of $88,900 B. decrease of $2,900 C. increase of $42,100 D. increase of $537,100
15-16. Kappen Corporation's contribution format income statement for October appears below:
15. The degree of operating leverage is closest to: A. 0.15 B. 0.28 C. 3.63 D. 6.79
16. What is the company's margin of safety in dollars? A. $100,000 B. $600,000 C. $1,500,000 D. $250,000
17. 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? A. 27.5% B. 45.3% C. 47.4% D. 68.4%
18-19 Erdmann Corporation has provided its contribution format income statement for July. The company produces and sells a single product.
18. If the company sells 7,500 units, its total contribution margin should be closest to: A. $55,063 B. $184,800 C. $210,000 D. $221,200
19. If the company sells 8,100 units, its net operating income should be closest to: A. $58,000 B. $63,600 C. $59,468 D. $76,200
20-23 Dorian Company produces and sells a single product. The product sells for $60 per unit and has a contribution margin ratio of 40%. The company's monthly fixed expenses are $28,800.
20. The variable expense per unit is: A. $31.20 B. $24.00 C. $36.00 D. $28.80
21. The break-even point in sales dollars is: A. $48,000 B. $72,000 C. $28,800 D. $0
22. If Dorian Company desires a monthly net operating income equal to 10% of sales, monthly sales will have to be: A. $90,000 B. $45,600 C. $120,000 D. $96,000
23. If the selling price is reduced by 5%, variable expenses reduced by $1.00, and fixed expenses increased to a total of $38,400, how many units would need to be sold to earn a net operating income of $21,000? A. 1,000 B. 2,700 C. 1,700 D. 2,950
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