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QUESTION 5 Stone Company plans to sell 200,000 calculators. The fixed costs are $600,000, and the variable costs are 60% of the selling price. If

QUESTION 5

  1. Stone Company plans to sell 200,000 calculators. The fixed costs are $600,000, and the variable costs are 60% of the selling price. If the company wants to realize a profit of $120,000, the selling price of each calculator must be:

$5.00

$7.50

$9.00

$10.00

QUESTION 6

  1. Brower Company manufacturers and sells one product for $100 per unit. The variable costs per unit are $70, and the monthly total fixed costs are $3,750. Last month Brower sold 100 units and expects sales to remain the same for the current month. If fixed costs increase by $750, what is the break-even point for the current month?

$6,400

$12.500

$15,000

$22,500

QUESTION 7

  1. The overall purpose of an operating budget is to:

Develop a plan to meet a specified goal

Determine disposable income

Both a and b

Neither a or b

QUESTION 8

  1. The section of a cash budget that identifies amounts that must be borrowed is called the:

Cash receipts section

Cash disbursements section

Cash excess or deficiency

Financing section

QUESTION 9

  1. NewGen Computers is preparing its budget for 2013. Sales for year are budgeted at $1,000,000; 20% are cash sales and 80% are credit sales. The company expects to collect 60% of call credit sales in 2013. Budgeted expenses are $800,000. These expenditures include $25,000 for depreciation and $497,000 for variable manufacturing overhead. Given this information, total cash outflows for 2013 would be:

$278,000

$303,000

$775,000

$800,000

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