Question1

TB Problem 3-160 Larita Corporation...

Larita Corporation produces and sells a single product. Data concerning that product appear below:

	Per Unit				Percent of Sales
Selling price	$	230				100	%
Variable expenses		92				40	%
Contribution margin	$	138				60	%

Fixed expenses are $351,000 per month. The company is currently selling 4,600 units per month.

The marketing manager believes that a $35,000 increase in the monthly advertising budget would result in a 200 unit increase in monthly sales.

Required:

What should be the overall effect on the company's monthly net operating income of this change? (Negative amount should be indicated by a minus sign.)

Question2

Brees Inc., a company that produces and sells a single product, has provided its contribution format income statement for April.

Sales (6,800 units)	$	401,200
Variable expenses		265,200
Contribution margin		136,000
Fixed expenses		103,500
Net operating income	$	32,500

If the company sells 6,700 units, its total contribution margin should be closest to:

$134,000

$31,979

$32,500

$28,000

Question3

Dybala Corporation produces and sells a single product. Data concerning that product appear below:

	Per Unit				Percent of Sales
Selling price	$	130				100	%
Variable expenses		91				70	%
Contribution margin		39				30	%

The company is currently selling 6,200 units per month. Fixed expenses are $220,000 per month. The marketing manager believes that a $6,700 increase in the monthly advertising budget would result in a 240 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change?

rev: 08_18_2016_QC_CS-57562

increase of $2,660

decrease of $6,700

increase of $9,360

decrease of $2,660

Question4

Data concerning Cutshall Enterprises Corporation's single product appear below:

Selling price per unit	$	280.00
Variable expense per unit	$	180.30
Fixed expense per month	$	509,392.00

The unit sales to attain the company's monthly target profit of $25,000 is closest to:

5,199

1,909

2,964

5,360

Question5

Closser Corporation produces and sells two products. In the most recent month, Product M50S had sales of $40,000 and variable expenses of $11,680. Product H50G had sales of $53,000 and variable expenses of $16,220. The fixed expenses of the entire company were $46,150. The break-even point for the entire company is closest to: (Round your intermediate calculations to 2 decimal places and final answers to the nearest dollar amount.)

$74,050

$46,150

$65,929

$65,889

Question6

TB MC Qu. 03-51 The Clyde Corporation's variable expenses...

The Clyde Corporation's variable expenses are 35% of sales. Clyde Corporation is contemplating an advertising campaign that will cost $19,900. If sales increase by $79,900, the company's net operating income will increase by: (Do not round intermediate calculations.)

$27,965

$32,035

$64,870

$8,955

Question7

TB MC Qu. 03-80 Sales in North Corporation increased...

Sales in North Corporation increased from $62,000 per year to $65,720 per year while net operating income increased from $12,000 to $14,160. Given this data, the company's degree of operating leverage must have been:

3.0

1.2

6.0

24.0

Question8

TB MC Qu. 03-103 A tile manufacturer has supplied...

A tile manufacturer has supplied the following data:

Boxes of tiles produced and sold		596,000
Sales revenue	$	3,874,000
Variable manufacturing expense	$	2,175,400
Fixed manufacturing expense	$	804,600
Variable selling and administrative expense	$	178,800
Fixed selling and administrative expense	$	149,000
Net operating income	$	566,200

If the company increases its unit sales volume by 4% without increasing its fixed expenses, then total net operating income should be closest to:

$22,648

$626,992

$154,985

$588,848

Question9

Solen Corporation's break-even-point in sales is $913,000, and its variable expenses are 75% of sales. If the company lost $45,000 last year, sales must have amounted to:

$868,000

$778,000

$733,000

$530,500

Question10

TB MC Qu. 03-55 Steeler Corporation is planning to sell...

Steeler Corporation is planning to sell 114,000 units for $2 per unit and will break even at this level of sales. Fixed expenses will be $78,660. What are the company's variable expenses per unit?

$0.69

$1.00

$1.31

$1.03