q 18-Which is the true statement?

a. The CVP income statement is prepared for both internal and external use.

b. In a CVP income statement, costs and expenses are classified only by function.

c. In a traditional income statement, costs and expenses are classified as either variable or fixed.

d. The CVP income statement shows contribution margin instead of gross profit.

Question 19

Old Dutch Company produces potato chips in their manufacturing facilities in Toronto. The company sells each large bag of chips for $4.75 and the costs are indicated below:

Potatoes $2.25 per bag

Spices $0.50 per bag

Other $0.25 per bag

Rent $10,000 per month

Salaries $7,500 per month

The company also pays it's sales staff $0.35 per bag that is sold.

Required: 8 marks

A) How many bags of chips would the company need to sell to break even?

B) Calculate the break even point in sales dollars

C) If the company wants to earn a profit of $60,000 how many units will it need to sell?

Question 20

The following information is taken from the production budget for the first quarter:

Beginning inventory in units 15,500

Sales (units) budgeted for the quarter 725,000

Capacity in units of production facility 800,000

How many finished goods units should be produced during the quarter if the company desires 17,500 units available to start the next quarter?

Select one:

a. 727,000

b. 692,000

c. 767,000

d. 709,500

Question 21

Rolls Right Manufacturing's accounting records reflect the following inventories:

Dec. 31, 2019 Dec. 31, 2020

Raw materials inventory $120,000 $ 96,000

Work in process inventory 156,000 174,000

Finished goods inventory 150,000 138,000

During 2020, Rolls Right purchased $980,000 of raw materials, incurred direct labor costs of $175,000, and incurred manufacturing overhead totaling $224,000.

How much would Rolls Right Manufacturing report as cost of goods manufactured for 2020?

Select one:

a. $1,397,000.

b. $1,229,000.

c. $1,385,000.

d. $1,391,000.

Question 22

The balanced scorecard

a. incorporates financial and nonfinancial measures in an integrated system.

b. is based solely on financial measures.

c. is based solely on nonfinancial measures.

d. does not use financial or nonfinancial measures.

Question 23

A division sold 100,000 products during 2021:

Sales $1,000,000

Variable costs:

Materials $220,000

Order processing 120,000

Billing labor 100,000

Selling expenses 30,000

Total variable costs 470,000

Fixed costs 500,000

How much is the unit contribution margin?

Select one:

a. $7.80

b. $7.50

c. $3.00

d. $5.30

Question 24

During July, the capital expenditure budget indicates a $1,125,000 purchase of equipment. The ending July cash balance from operations is budgeted to be $800,000. The company wants to maintain a minimum cash balance of $350,000. What is the minimum cash loan that must be planned to be borrowed from the bank during July?

a. $775,000

b. $325,000

c. $675,000

d. $350,000