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31.Franklin Company a medium-sized manufacturer of bicycles. During the year

Question : 31.Franklin Company a medium-sized manufacturer of bicycles. During the year : 1416286

 

31.Franklin Company is a medium-sized manufacturer of bicycles. During the year a new line called "Radical" was made available to Franklin's customers.  The break-even point for sales of Radical is $250,000 with a contribution margin ratio of 40 percent.  Assuming that the profit for the Radical line during the year amounted to $80,000, total sales during the year would have amounted to:

a.$450,000.

b.$420,000.

c.$400,000.

d.$475,000.

32.Kehler Corporation wished to market a new product for $2.00 a unit.  Fixed costs to manufacture this product are $100,000.  The contribution margin is 40 percent.  How many units must be sold to realize net income of $100,000 from this product?

a.200,000

b.250,000

c.300,000

d.350,000

33.The Blue Saints Band is holding a concert in Toronto.  Fixed costs relating to staging a concert are $350,000.  Variable costs per patron are $5.00.  The selling price for a tickets $25.00.  The Blue Saints Band has sold 23,000 tickets so far.

 

How many tickets does the Blue Saints Band need to sell to achieve net income of $75,000.

a.21,250

b.14,000

c.17,500

d.17,000

 

34.Consider the income statement for Pickbury Farm:

Sales$500,000

Variable costs350,000

Contribution margin150,000

Fixed costs80,000

Net income$ 70,000

 

At what sales level does Pickbury achieve net income of $100,000?

a.$700,000

b.$600,000

c.$300,000

d.$530,000

35.If the fixed costs related to a product increase while variable costs and sales price remain constant, what will happen to (1) contribution margin and (2) break-even point?

 

Contribution

MarginBreak-even

Point

 

a.Unchanged        Unchanged

b.Unchanged        Increase

c.Increase         Decrease

d.Decrease         Increase

36.Which of the following would cause the break-even point to change?

a.Sales volume increased.

b.Fixed costs increased due to addition to physical plant.

c.Total variable costs increased as a function of higher production.

d.Total production decreased.

37.A company increased the selling price for its product from $1.00 to $1.20 a unit when total fixed costs increased from $400,000 to $450,000 and variable cost per unit remained unchanged.  How would these changes affect the break-even point?

a.The break-even point in units would be increased.

b.The break-even point in units would be decreased.

c.The break-even point in units would remain unchanged.

d.The effect cannot be determined from the information given.

38.The relative percentage of unit sales among the various products made by a firm is the:

a.sales volume.

b.sales margin.

c.sales mix.

d.sales ratio.

39.Consider the following information about the Gumm Company:

 

Budgeted SalesUnit Contribution Margin

Mint gum6,000 cases$2.00

Bubble gum4,000 cases$2.50

 

Budgeted fixed costs are $550,000.  The weighted-average unit contribution margin is:

a.$2.25

b.$4.50

c.$2.20

d.$2.30

40.Consider the following information about the Gumm Company:

 

Budgeted SalesUnit Contribution Margin

Mint gum6,000 cases$2.00

Bubble gum4,000 cases$2.50

 

Budgeted fixed costs are $550,000.  The break-even point in total cases is:

a.250,000

b.275,000

c.220,000

d.200,000

 

 

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