ROGERS 7:07 PM Done tb03.docx satety and operating leverage 122. Melissa Moser expects next year's degree of operating leverage to increase. Which of the following statements is consistent with Melissa's expectations? a) Next year's activity level is budgeted to be lower than this year's. b) Next year's total fixed costs are expected to be lower than this year's. c) Next year's selling price is expected to increase. d) Next year's variable costs per unit are expected to decrease Answer: a Difficulty: Medium Learning Objective: Assess operational risk using margin of safety and operating leverage CPA: Management Accounting 123. The Fricker Co. sells three products in a ratio of 3:2:6 The contribution margins for the units are $10, $25, and $30, respectively. Total fixed costs are $119,600. What is the breakeven point in total number of units? a) 20,420 b) 10,120 c) 15,180 d) 5,060 Answer: d Difficulty: Easy Learning Objective: Apply CVP calculations for multiple products. 124. The Fricker Co. sells three products in a ratio of 3:2:6 The contribution margins for the units are $10, $25, and $30, respectively. Total fixed costs are $119,600. ROGERS 7:08 PM Done tb03.docx 109. Apple Enterprises projects the following for next year: Sales Fixed costs After-tax profit Tax rate $300,000 $100,000 $12,000 40% What is the firm's margin of safety in revenue? a) $200,000 b) $20,000 c) $188,000 d) $50,000 Answer: d Difficulty: Medium Learning Objective: Assess operational risk using margin of safety and operating leverage CPA: Management Accounting 110. Old MacDonald had a farm with expected fixed costs for next year of $91,000. The projected selling price per bushel is $12, with variable costs of $5 per bushel. How many bushels past the breakeven point does MacDonald have to sell to realize a pre-tax profit of $37,100? a) 18,300 b) 5,300 c) 7,420 d) 13,000 Answer: b Difficulty: Medium Learning Objective: Apply CVP calculations for a single product. 111. Old MacDonald had a farm with expected fixed costs for next year of $91,000. The projected selling price per bushel is $12, with variable costs of $5 per bushel. ROGERS 7:07 PM Done tb03.docx satety and operating leverage 122. Melissa Moser expects next year's degree of operating leverage to increase. Which of the following statements is consistent with Melissa's expectations? a) Next year's activity level is budgeted to be lower than this year's. b) Next year's total fixed costs are expected to be lower than this year's. c) Next year's selling price is expected to increase. d) Next year's variable costs per unit are expected to decrease Answer: a Difficulty: Medium Learning Objective: Assess operational risk using margin of safety and operating leverage CPA: Management Accounting 123. The Fricker Co. sells three products in a ratio of 3:2:6 The contribution margins for the units are $10, $25, and $30, respectively. Total fixed costs are $119,600. What is the breakeven point in total number of units? a) 20,420 b) 10,120 c) 15,180 d) 5,060 Answer: d Difficulty: Easy Learning Objective: Apply CVP calculations for multiple products. 124. The Fricker Co. sells three products in a ratio of 3:2:6 The contribution margins for the units are $10, $25, and $30, respectively. Total fixed costs are $119,600. ROGERS 7:08 PM Done tb03.docx 109. Apple Enterprises projects the following for next year: Sales Fixed costs After-tax profit Tax rate $300,000 $100,000 $12,000 40% What is the firm's margin of safety in revenue? a) $200,000 b) $20,000 c) $188,000 d) $50,000 Answer: d Difficulty: Medium Learning Objective: Assess operational risk using margin of safety and operating leverage CPA: Management Accounting 110. Old MacDonald had a farm with expected fixed costs for next year of $91,000. The projected selling price per bushel is $12, with variable costs of $5 per bushel. How many bushels past the breakeven point does MacDonald have to sell to realize a pre-tax profit of $37,100? a) 18,300 b) 5,300 c) 7,420 d) 13,000 Answer: b Difficulty: Medium Learning Objective: Apply CVP calculations for a single product. 111. Old MacDonald had a farm with expected fixed costs for next year of $91,000. The projected selling price per bushel is $12, with variable costs of $5 per bushel
