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Study Resources (Accounting)

58) The following information relates to current production of outdoor chaise lounges Backyard Posh: Variable manufacturing costs per unit $ 102.00 Total fixed manufacturing costs $ 525,000 Variable marketing and administrative costs per unit $ 30.00 Total fixed marketing and administrative costs $ 250,000 The regular selling price per chaise lounge is $300.00. The company is analyzing the opportunity.
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288) The following data is related to sales and production of the Tauro Corporation for last year. Selling price per unit $ 60.00 Variable manufacturing cost per unit $ 25.00 Variable selling and administrative expense per unit $ 6.00 Fixed manufacturing overhead (in total) $ 50,000 Fixed selling and administrative expenses (in total) $.
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233) Stanley's Candies is considering building a new plant in Europe. It predicts sales at the new plant to be 40,000 units at $4.00/unit. Below is a listing of estimated expenses: Category Total Annual Expenses % of Annual Expense that are Fixed Materials $20,000 10% Labor $30,000 20% Overhead $50,000 40% Marketing/Admin $10,000 60% A European firm was contracted to sell the product and will receive.
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74) Companies operating in highly competitive industries are generally price-setters. 75) When setting prices, a company need not consider whether it is a price-taker or a price-setter for each product that it sells. 76) A price-setter company emphasizes a cost-plus approach to pricing. 77) For a product, revenue at market price plus desired.
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166) Lewis Enterprises management has budgeted the following amounts for its next fiscal year: Total fixed expenses $500,000 Selling price per unit $1,000 Variable expenses per unit $750 Requirements: a.If Lewis Enterprises can reduce fixed expenses by $25,000, how will breakeven sales in units be affected? b.If Lewis Enterprises spends an additional $1,000 on advertising, sales volume should increase.
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101) Cedar Mills Incorporated has a predicted operating income of $72,000. Its total variable expenses are $20,000 and its total fixed expenses are $32,000. It has a unit contribution margin of $10. Cedar Mills' breakeven sales in units is A) 8,400. B) 10,400. C) 4,000. D) 12,400. 102) Cedar Mills Incorporated desires an operating income.
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147) Scott Incorporated management has budgeted the following amounts for its next fiscal year: Total fixed expenses $585,000 Selling price per unit $50 Variable expenses per unit $22 If fixed expenses increase by 10%, to maintain the original breakeven sales in units, the selling price per unit would have to be A) increased by 17.60%. B) increased by 105.60%. C).
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91) Martin Enterprises provides the following information about its single product. Targeted operating income $50,830 Selling price per unit $6.55 Variable cost per unit $4.25 Total fixed cost $94,070 What is the breakeven point in units? A) 22,100 B) 8,710 C) 40,900 D) 4,706 92) Martin Enterprises provides the following information about its single product. Targeted operating income $50,830 Selling price per unit $6.55 Variable cost per unit $4.25 Total fixed.
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213) A company's margin of safety can be stated A) in units. B) in dollars. C) as a percentage of sales. D) any of the above. 214) A company's margin of safety is computed as A) actual sales—expected sales. B) expected sales—actual sales. C) expected sales—sales at breakeven. D) sales at breakeven—expected sales. 215) All else being equal, a company.
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11) An "opportunity cost" is best described by which of the following? A) Benefits foregone by choosing a particular alternative course of action B) Costs that were incurred in the past and cannot be changed C) The distribution of all products to be sold D) Expected future costs that differ among alternatives 12) A "relevant.
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157) Star Corporation management has budgeted the following amounts for its next fiscal year: Total fixed expenses $450,000 Selling price per unit $50 Variable expenses per unit $25 If Star Corporation spends an additional $20,000 on advertising, sales volume should increase by 3,000 units. What effect will this have on operating income? A) Increase of $75,000 B) Increase of.
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21) What is contribution margin equal to on a contribution margin income statement? A) Fixed expenses plus variable expenses B) Fixed expenses minus variable expenses C) Sales revenues minus variable expenses D) Sales revenues minus fixed expenses 22) Dairy Days Ice Cream sells ice cream cones for $4 per customer. Variable costs are $3.
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1) The contribution margin per unit is how much profit each unit contributes after fixed costs are considered. 2) CVP stands for Company—Volume—Profit. 3) CVP assumes that inventory levels will not change. 4) When using the contribution margin ratio, managers project operating income based upon sales units. 5) A product's contribution margin per unit.
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289) Snowy Mountain Company has the following selected data for the past year: Units sold during year 30,000 Units produced during year 45,000 Units in ending inventory 15,000 Variable manufacturing cost per unit $ 4.50 Fixed manufacturing overhead (in total) $ 20,250 Selling price per unit $ 12.00 Variable selling and administrative expense per unit $ 1.00 Fixed.
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248) Heavenly Cupcakes has a monthly target operating income of $12,000. Variable expenses are 40% of sales and monthly fixed expenses are $8,000. Requirements: a.What is the monthly margin of safety in dollars if the business achieves its operating income goal? b.What is the monthly margin of safety as a percentage of.
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41) Marie's Magic Shoppe provides the following information about its single product. Targeted operating income $38,000 Selling price per unit $25.00 Variable cost per unit $12.00 Total fixed cost $85,000 What is the contribution margin ratio? A) 1.92 B) 0.52 C) 0.13 D) 0.48 42) Antonio's Flowers sells bouquets for $65 each. The variable costs for each kit are $45. The total contribution margin.
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11) CVP analysis assumes that the only factor that affects costs is a change in sale price. 12) Total contribution margin less total fixed expenses equals A) contribution margin ratio. B) operating income. C) gross profit. D) sales revenue. 13) The unit contribution margin is computed by A) subtracting the variable cost per unit from the sales.
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63) Indicate whether each item below is a characteristic of a price-taker or a price-setter. Use PT for price-taker and PS for price-setter. a)Cost-plus pricing b)Product lacks uniqueness c)Less competition d)Target pricing e)Heavy competition 64) Mountaintop golf course is planning for the coming season. Investors would like to earn a 12% return on the company's $50.
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94) Which of the following pairs are characteristics of price-takers? A) Less competition and target pricing B) Cost-plus pricing and less competition C) Target costing and heavy competition D) Cost-plus pricing and lack of product uniqueness 95) Which of the following pairs are characteristics of price-setters? A) Less competition and target costing B) Cost-plus pricing and less.
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84) When setting prices, managers need to consider all costs. 85) Managers need to consider variable costs, fixed costs, inventoriable product costs and period costs when setting prices. 86) Cost-plus pricing is essentially the opposite of target-costing. 87) Which of the following best describes "target costing"? A) An approach to pricing that.
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243) Neeley Grocery has a monthly target operating income of $25,000. Variable expenses are 20% of sales and monthly fixed expenses are $15,000. What is Neeley Grocery's operating leverage factor at the target level of operating income? A) 0.63 B) 2.67 C) 0.40 D) 1.60 244) Garfield Corporation is considering building a new plant in.
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38) A manager should always reject a special order if A) the special order price is less than the variable costs of the order. B) there is available excess capacity. C) the special order price is less than the regular sales price. D) the special order will require variable nonmanufacturing expenses. 39) Which would be.
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201) Papa Pastries sells Donuts, Muffins, and Mixed Dozens. It sold 10,000 dozens last year. Mixtures outsold Muffins by a margin of 2 to 1. Sales of Donuts were the same as sales of Mixtures. Fixed costs for Papa Pastries are $19,600 and additional information follows: Product Unit Sales Prices Unit Variable Cost Dozen.
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127) If the fixed costs increase while the sales price per unit and variable costs per unit remain constant, which of the following statements is true? A) The contribution margin stays the same and the breakeven point increases. B) The contribution margin decreases and the breakeven point increases. C) The contribution margin stays.
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49) Neeley Incorporated had the following fixed costs: Fixed manufacturing costs $ 98,000 Fixed marketing costs $ 40,000 Fixed administrative costs $ 18,000 The company also had the following variable costs: Variable manufacturing costs$ 124,000 Variable marketing costs$   30,000 Variable administrative costs$   28,000 The company produced and sold 55,000 units of the product during the year at a.
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223) Hyde's Headphones sells deluxe headphones for $75 each. Unit variable expenses total $45. The breakeven sales in units is 2,400 and budgeted sales in units is 4,200. What is the margin of safety in dollars? A) $24 B) $135,000 C) $495,000 D) $1,800 224) Moe's Pizza Shop sells a large pizza for $11.50. Unit.
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72) Heinz Manufacturing produces Item Q with variable manufacturing costs of $12/unit. The selling price of Item Q is $15/unit. The fixed manufacturing overhead cost is $72,000. A normal production run includes 100,000 units. Heinz Manufacturing has discovered an additional process to change Item Q into Item QR. Additional costs.
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1) Irrelevant costs are costs that do not affect short-term decisions. 2) Relevant information is future data that do not differ among alternatives. 3) Management accountants gather and analyze relevant information to compare alternatives. 4) One key to analyzing short-term business decisions is to focus on relevant revenues, costs and profits. 5) One key.
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202) Kent Coffee Haus sells Drip Coffee, Cappuccino, or Lattes. It sold 20,000 total cups of various coffee products last year. Drip Coffee outsold Cappuccino 2 to 1. Sales of Lattes were the same as sales of Drip Coffee. Fixed costs for the company are $15,000 and additional information follows: Product Unit.
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73) Heinz Manufacturing produces Item Q with variable manufacturing costs of $12/unit. The selling price of Item Q is $15/unit. The fixed manufacturing overhead cost is $72,000. A normal production run includes 100,000 units. Heinz Manufacturing has discovered an additional process to change Item Q into Item QR. Additional costs.
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117) CVP analysis helps managers prepare for and respond to economic changes, such as increasing costs and pressure to drop sales price. 118) If all other factors are constant, any decrease in fixed costs will decrease the breakeven point. 119) Holding all other factors constant, the breakeven point will always double if.
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68) Revved Up Toys manufactures a computer chip used in the production of remote control cars. When 6,000 cars are produced, the costs per part are: Direct materials $2.50 Direct labor 1.50 Variable manufacturing overhead 1.00 Fixed manufacturing overhead 1.75 Total $6.75 Sam's Associates has offered to sell Revved Up Toys 6,000 parts for $5.75 each. If Sarah.
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48) Comfort Cloud manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but is currently producing and selling 75,000 seats per year. The following information relates to current production: Sale price per unit $400 Variable costs per unit:      Manufacturing $220      Marketing and administrative $50 Total fixed costs:     Manufacturing $750,000     Marketing and.
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114) Rogers Incorporated has a targeted operating income of $518,000 for the upcoming year. The selling price of its single product is $40.50 each, while the variable cost per unit is $12.50. Fixed costs total $182,000. Calculate the following: a.Contribution margin per unit b.Breakeven point in units c.Units to be sold to earn the.
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187) Sandy Incorporated sells two products, larges and smalls. Larges sell for $90 per unit with variable costs of $60 per unit. Smalls sell for $30 per unit with variable costs of $10 per unit. Total fixed costs for the company are $41,600. Sandy Incorporated typically sells three larges for.
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