Question
If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio? a. 55% b. 32%
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If sales are $820,000, variable costs are 55% of sales, and operating income is $260,000, what is the contribution margin ratio?
a. 55%
b. 32%
c. 45%
d. 62%
1 points
Question 51
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The three most common cost behavior classifications are
a. variable costs, period costs, and differential costs
b. variable costs, product costs, and sunk costs
c. fixed costs, variable costs, and mixed costs
d. variable costs, sunk costs, and opportunity costs
1 points
Question 52
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In a profit center, the department manager has responsibility for and the authority to make decisions that affect
a. costs and assets invested in the center, but not revenues
b. the assets invested in the center, but not costs and revenues
c. both costs and revenues for the department or division
d. not only costs and revenues, but also assets invested in the center
1 points
Question 53
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Privett Company Accounts payable $ 30,000
Accounts receivable 35,000
Accrued liabilities 7,000
Cash 25,000
Intangible assets 40,000
Inventory 72,000
Long-term investments 100,000
Long-term liabilities 75,000
Marketable securities 36,000
Notes payable (short-term) 20,000
Property, plant, and equipment 400,000
Prepaid expenses 2,000
Based on the data for Privett Company, what is the amount of working capital?
a. $213,000
b. $113,000
c. $39,000
d. $153,000
1 points
Question 54
Carmelita Inc., has the following information available:
Costs from Beginning Inventory Costs from current Period Direct materials 2,000 $ 22,252 Conversion costs 6,200 150,536 At the beginning of the period, there were 500 units in process that were 60% complete as to conversion costs and 100% complete as to direct materials costs. During the period, 4,500 units were started and completed. Ending inventory contained 340 units that were 30% complete as to conversion costs and 100% complete as to materials costs. Assume that the company uses the FIFO process cost method. Round cost per unit figures to two cents, i.e., $2.22, when calculating total costs.
The total costs that will be transferred into Finished Goods for units started and completed were
a. $161,505
b. $156,960
c. $162,855
d. $161,775
1 points
Question 55
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The four steps necessary to complete a cost of production report in a process cost system are
1. allocate costs to transferred and partially completed units 2. determine the units to be assigned costs 3. determine the cost per equivalent unit 4. calculate equivalent units of production The correct ordering of the steps is
a. 2, 3, 4, 1
b. 2, 4, 3, 1
c. 4, 2, 3, 1
d. 2, 3, 1, 4
1 points
Question 56
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Period costs include
a. operating costs that are shown on the income statement when products are sold
b. current assets on the balance sheet
c. current liabilities on the balance sheet
d. operating costs that are shown on the income statement in the period in which they are incurred
1 points
Question 57
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A product cost is
a. expensed in the period in which it is manufactured
b. shown with operating expenses on the income statement
c. shown with current liabilities on the balance sheet
d. expensed in the period the product is sold
1 points
Question 58
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The following financial information was summarized from the accounting records of Train Corporation for the current year ended December 31:
Rails
DivisionLocomotive
DivisionCorporate
TotalCost of goods sold $ 47,200
$30,720
Direct operating expenses 27,200
20,040
Sales 108,000
78,000
Interest expense $ 2,040
General overhead 18,160
Income tax 4,700
The gross profit for the Rails Division is
a. $60,800
b. $8,700
c. $21,150
d. $33,600
1 points
Question 59
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Spice Inc.'s unit selling price is $60, the unit variable costs are $35, fixed costs are $125,000, and current sales are 10,000 units. How much will operating income change if sales increase by 8,000 units?
a. $150,000 increase
b. $175,000 increase
c. $150,000 decrease
d. $200,000 increase
1 points
Question 60
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For April, sales revenue is $700,000; sales commissions are 5% of sales; the sales manager's salary is $98,000; advertising expenses are $90,000; shipping expenses total 2% of sales; and miscellaneous selling expenses are $2,100 plus 1/2 of 1% of sales. Total selling expenses for the month of April are
a. $159,100
b. $242,600
c. $186,000
d. $182,100
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