Please provide a solution for each item 30-60.

30. The following information relates to the break-even point at Pezzo Corporation: $120,000 Total fixed expenses......... $30,000 If Pezzo wants to generate net operating income of $12,000, what will its sales dollars have to be? A) $132,000 B) $136,000 C) $168,000 D) $176,000 Answer: C Level: Hard LO: 1,3,5,631. The following information relates to Snowbird Corporation: Sales at the break-even point..... $312,500 Total fixed expenses........ $250,000 Net operating income .........."; $150,000 What is Snowbird's margin of safety? A) $62,500 B) $187,500 C) $100,000 D) $212,500 Answer: B Level: Hard LO: 1,3,5,7 32. The "Dog Hut" hot dog stand expects the following operating results for next year: Sales. $280,000 Net operating income .......... $21,000 Contribution margin ratio. 70% What is Dog Hut's break-even point next year in sales dollars? A) $120,000 B) $181,300 C) $196,000 D) $250,000 Answer: D Level: Hard LO: 1,3,533. The following information relates to Zinc Corporation for last year: Sales ........................................................... $500,000 Net operating income ................................ $25,000 Degree of operating leverage .................... 5 Sales at Zinc are expected to be $600,000 next year. Assuming no change in cost structure, this means that net operating income for next year should be: A} $30,000 B} $45,000 C} $50,000 D} $125,000 Answer: C Level: Hard LO: 1,3,8 34. The following information pertains to Nova Co.'s cost-volume-profit relationships: Breakeven point in units sold . 1,000 Variable expenses per unit . $500 Total fixed expenses....... $150,000 How much will be contributed to net operating income by the 1,001st unit sold? A) $650 B) $500 C) $150 D) $0 Answer: C Level: Medium LO: 1,5 35. Barnes Corporation expected to sell 150,000 games during the month of November. The following budgeted data are based on that level of sales: Revenue (150,000 games) ...... $2,400,000 Variable expenses.. 1,425,000 Fixed manufacturing overhead expenses ......... 250,000 Fixed selling & administrative expenses.... 500,000 Net operating income ... 225,000 Barnes' actual sales during November were 180,000 games. What should the actual net operating income during November have been? A) $450,000 B) $270,000 C) $420,000 D) $510,000 Answer: C Level: Medium LO: 1 Source: CMA, adapted36. Carver Company produces a product which sells for $40. Variable manufacturing costs are $18 per unit. Fixed manufacturing costs are $5 per unit based on the current level of activity, and fixed selling and administrative costs are $4 per unit. A selling commission of 15% of the selling price is paid on each unit sold. The contribution margin per unit is: A) $7 B) $17 C) $22 D) $16 Answer: D Level: Easy LO: 137. Tice Company is a medium-sized manufacturer of lamps. During the year a new line called "Horolin" was made available to Tice's customers. The break-even point for sales of Horolin is $200,000 with a contribution margin of 40%. Assuming that the profit for the Horolin line during the year amounted to $100,000, total sales during the year would have amounted to: A) $300,000 B) $420,000 C) $450,000 D) $475,000 Answer: C Level: Hard LO: 3,5,6 Source: CPA, adapted 38. Black Company's sales are $600,000, its fixed expenses are $150,000, and its variable expenses are 60% of sales. Based on this information, the margin of safety is: A) $90,000 B) $190,000 C) $225,000 D) $240,000 Answer: C Level: Medium LO: 3,5,7 39. Variable expenses for Alpha Company are 40% of sales. What are sales at the break- even point, assuming that fixed expenses total $150,000 per year: A) $250,000 B) $375,000 C) $600,000 D) $150,000 Answer: A Level: Easy LO: 3,540. Minist Company sells a single product at a selling price of $15.00 per unit. Last year, the company's sales revenue was $225,000 and its net operating income was $18,000. If fixed expenses totaled $72,000 for the year, the break-even point in unit sales was A) 15,000 B) 9,900 C) 14,100 D) 12,000 Answer: D Level: Hard LO: 3,541. Winger Corp. sells a product for $5 per unit. The fixed expenses are $210,000 and the unit variable expenses are 60% of the selling price. What sales would be necessary in order for Winger Corp. to realize a profit of 10% of sales? A) $700,000 B) $525,000 C) $472,500 D) $420,000 Answer: A Level: Hard LO: 3,6 Source: CPA, adapted 42. Sales in East Company declined from $100,000 per year to $80,000 per year, while net operating income declined by 300 percent. Given these data, the company must have had an operating leverage of: A) 15 B) 2.7 C) 30 D) 12 Answer: A Level: Hard LO: 3,8 43. Darth Company sells three products. Sales and contribution margin ratios for the three products follow: Product X Y Z Sales in dollars . $20,000 $40,000 $100,000 contribution margin ratio ............. 45% 40% 15% Given these data, the contribution margin ratio for the company as a whole would be: A) 25% B) 75% C) 33.3% D) it is impossible to determine from the given data Answer: A Level: Medium LO: 3,944. Sunnripe Company manufactures and sells two types of beach towels, standard and 45. deluxe. Sunnripe expects the following operating results next year for each type of towel: Standard Deluxe Sales ............................................... $45 0,000 $50,000 Variable expenses (total) ............... $360,000 $20,000 Sunnripe expects to have a total of $57,600 in fixed expenses next year. What is Sunnripe's break-even point next year in sales dollars? A] $22,000 B} $144,000 C} $192,000 D] $240,000 Answer: D Level: Hard LO: 3,9 Cindy, Inc. sells a product for $10 per unit. The variable expenses are $6 per unit, and the xed expenses total $35,000 per period. By how much will net operating income change if sales are expected to increase by $40,000? A] $16,000 increase B} $5,000 increase C} $24,000 increase D] $1 1,000 decrease Answer: A Level: Medium LO: 3 46. Bimey Company has prepared the following budget data: Sales .............................................................. 150,000 units Selling price .................................................. $25 per unit 1Variable expenses ......................................... $15 per unit Fixed manufacturing expenses ..................... $800,000 Fixed selling and admin. expenses ............... $700,000 An advertising agency claims that an aggressive advertising campaign would enable the company to increase its unit sales by 20%. What is the maximum amount that the company can pay for advertising and obtain a net operating income of $200,000? A} $100,000 B) $200,000 C) $300,000 D} $550,000 Answer: A Level: Hard LO: 4,6 Source: CPA, adapted 4?. During last year, Thor Lab supplied hospitals with a comprehensive diagnostic kit for $120. At a volume of 30,000 kits, Thor had fixed expenses of $1,000,000 and net operating income of $200,000. Because of an adverse legal decision, Thor's liability insurance expenses this year will be $1,200,000 more than they were last year. Assuming that the volume and other costs are unchanged, what should be the sales price this year if Thor is to make the same $200,000 net operating income? A} $120 13} $135 C} $150 D} $240 Answer: B Level: Medium LO: 4,6 Source: CPA, adapted 43. How much will a company's net operating income change if it undertakes an advertising campaign given the following data: Cost of advertising campaign ...................................... $25,000 1Variable expense as a percentage of sales ................... 42% Increase in sales ........................................................... $60,000 A} $200 increase 13} $25,200 increase C} $15,000 increase D} $9,300 increase Answer: D Level: Hard L0: 4 49. 50. Sun Company's tentative budget for next year is as follows: Sales ........................................................... $600,000 1l|'ariable expenses ...................................... 360,000 Fixed expenses: Manufacturing ........................................ 90,000 Selling and administrative ...................... 1 10,000 Net operating income ............................. $40,000 l'vir. Johnston, the marketing manager, has proposed an aggressive advertising campaign costing an additional $50,000 that he predicts will result in a 30% unit sales increase. Assuming that Johnston's proposal is incorporated into the budget, what should be the increase in the budgeted net operating income for next year? A} $12,000 B} $22,000 C} $72,000 D} $130,000 Answer: B Level: Hard LO: 4 Source: CPA, adapted Last year, variable expenses were 60% of total sales and xed expenses were 10% of total sales. If the company,r increases its selling prices by 10%, but iffixed expenses, variable costs per unit, and unit sales remain unchanged, the effect of the increase in selling price on the company's total contribution margin would be: A} a decrease of 2% B} an increase of 5% C} an increase of 10% D} an increase of25% Answer: D Level: Hard LO: 4 Source: CIMA, adapted 51. Moruzzi Corporation is a single-product company that expects the following operating results for next year: Sales. $320,000 Contribution margin per unit.. $0.20 Contribution margin ratio . 25% Degree of operating leverage How many units would Moruzzi have to sell next year to break-even? A) 50,000 B) 200,000 C) 280,000 D) 350,000 Answer: D Level: Hard LO: 5 52. Mason Company's selling price was $20.00 per unit. Fixed expenses totaled $54,000, variable expenses were $14.00 per unit, and the company reported a profit of $9,000 for the year. The break-even point for Mason Company is: A) 10,500 units B) 4,500 units C) 8,500 units D) 9,000 units Answer: D Level: Medium LO: 5 53. Given the following data: Selling price per Unit .......... $2.00 Variable production cost per unit . $0.30 Fixed production cost .. $3,000 Sales commission per unit.. $0.20 Fixed selling expenses. $1,500 The break-even point in dollars is: A) $6,000 B) $4,500 C) $2,647 D) $4,000 Answer: A Level: Easy LO: 554. Hollis Company sells a single product for $20 per unit. The company's fixed expenses total $240,000 per year, and variable expenses are $12 per unit of product. The company's break-even point is: A) $400,000 B) $600,000 C) 20,000 units D) 12,000 units Answer: B Level: Easy LO: 5 55. Darwin, Inc., sells a particular textbook for $20. Variable expenses are $14 per book. At the current volume of 50,000 books sold per year the company is just breaking even. Given these data, the annual fixed expenses associated with the textbook total: A) $300,000 B) $1,000,000 C) $1,300,000 D) $700,000 Answer: A Level: Medium LO: 5 56. Singapore Candy Cane Company is a single product firm with the following cost structure for next year: Selling price per unit .... $1.20 Variable expenses per unit ..... $0.72 Total fixed expenses for the year .. $64,800 What is the company's break-even point next year in sales dollars? A) $90,000 B) $108,000 C) $135,000 D) $162,000 Answer: D Level: Medium LO: 557. Garcia Veterinary Clinic expects the following operating results next year: Sales (total)... $600,000 Variable expenses (total) ... $120,000 Fixed expenses (total)....... $300,000 What is Garcia's break-even point next year in sales dollars? A) $240,000 B) $375,000 C) $400,000 D) $420,000 Answer: B Level: Medium LO: 5 58. Frank Company manufacturers a single product that has a selling price of $20.00 per unit. Fixed expenses total $45,000 per year, and the company must sell 5,000 units to break even. If the company has a target profit of $13,500, sales in units must be: A) 6,000 B) 5,750 C) 6,500 D) 7,925 Answer: C Level: Hard LO: 6 59. Spencer Company expects to sell 60,000 units next year. Variable production costs are $4 per unit, and variable selling costs are 10% of the selling price. Fixed expenses are $1 15,000 per year, and the company has set a target profit of $50,000. Based on this information, the unit selling price should be: A) $7.00 B) $10.75 C) $7.50 D) $6.75 Answer: C Level: Hard LO: 660. Company X sold 25,000 units of product last year. The contribution margin per unit was $2, and fixed expenses totaled $40,000 for the year. This year fixed expenses are expected to increase to $45,000, but the contribution margin per unit will remain unchanged at $2. How many units must be sold this year to earn the same net operating income as was earned last year: A) 22,500 B) 27,500 C) 35,000 D) 2,500 Answer: B Level: Medium LO: 6