Info
Warning
Danger

Study Resources (Accounting)

36) Duncan Enterprises is considering building a new plant in Canada.  They predict sales at the new plant to be 50,000 units at $10.00/unit.  Below is a listing of estimated expenses. Category Total Annual Expenses % of Annual Expense that are Fixed Materials $50,000 10% Labor $90,000 20% Overhead $40,000 30% Marketing/Admin $20,000 50% A Canadian firm was contracted to sell the product and will receive a.
5 Views
View Answer
31) The following selected data relates to Lazarus Corporation: Total fixed costs $22,000 Sale price per unit $25 Variable costs per unit $18 Assuming 8,000 units are sold, what is the contribution margin? A) $56,000 B) $78,000 C) $34,000 D) $344,000 32) The following selected data relates to Lazarus Corporation: Total fixed costs $22,000 Sale price per unit $25 Variable costs per unit $18 If sales revenue per unit.
6 Views
View Answer
1) CVP stands for Cost—Volume—Profit. 2) CVP assumes that inventory levels change. 3) When using the contribution margin ratio, managers project operating income based upon sales units. 4) A product's contribution margin per unit is the excess value of the selling price per unit over the fixed cost of obtaining and selling each.
12 Views
View Answer
25) What is the difference between relevant and irrelevant information for making decisions. Provide examples of each. 1) Special orders increase income if the revenue from the order exceeds the incremental variable and fixed costs incurred to fill the order. 2) In deciding whether to accept a special sales order, any fixed.
5 Views
View Answer
47) The contribution margin ratio is computed by: A) dividing the variable cost per unit by the sales revenue per unit.. B) subtracting the variable cost per unit from the sales price per unit. C) dividing the sales revenue per unit by variable cost per unit. D) dividing contribution margin per unit by the.
4 Views
View Answer
1) Relevant information is future data that differs among alternatives. 2) Management accountants gather and analyze relevant information to compare alternatives. 3) One key to analyzing short-term business decisions is to focus on irrelevant revenues, costs and profits. 4) One key to analyzing short-term business decisions is to use a contribution margin approach.
12 Views
View Answer
11) The unit contribution margin is computed by: A) dividing the variable cost per unit by the sales revenue. B) subtracting the sales price per unit from the variable cost per unit. C) subtracting the variable cost per unit from the sales price per unit. D) dividing the sales revenue by variable cost per.
7 Views
View Answer
11) Which of the following statements is TRUE if the variable cost per unit increases while the sale price per unit and total fixed costs remain constant? A) Breakeven point in units increases. B) Breakeven point in units decreases. C) Breakeven point in units remains the same. D) Contribution margin ratio increases. 12) Which of.
10 Views
View Answer
37) Arnold Bess, Tailor  has a monthly target operating income of $5,000. Variable expenses are 60% of sales and monthly fixed expenses are $2,000. Requirements: b.  What is the monthly margin of safety as a percentage of target sales in dollars? c.  What is Arnold Bess's operating leverage factor at the target level.
3 Views
View Answer
8) A company that sells thousands of different products would be more likely to calculate breakeven in terms of sales units, rather than sales revenue. 9) When calculating the breakeven point in terms of units, fixed costs should be divided by the contribution margin ratio. 10) When calculating the breakeven point in.
5 Views
View Answer
26) The following information relates to current production of bench seats for boats at Aquamarine Manufacturing: 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 bench seat is $200.00.  The company is.
5 Views
View Answer
16) Woodson Corporation provided the following information regarding its only product: Sale price per unit $65.00 Direct materials used $160,000 Direct labor incurred $185,000 Variable manufacturing overhead $120,000 Variable selling and administrative expenses $70,000 Fixed manufacturing overhead $65,000 Fixed selling and administrative expenses $12,000 Units produced and sold 10,000 Assume no.
17 Views
View Answer
49) Sandy Valley Company has the following selected data for the past year: Units sold during year           30,000 Units produced during year           40,000 Units in ending inventory           10,000 Variable manufacturing cost per unit $5.50 Fixed manufacturing overhead (in total) $20,000 Selling price per unit $10.00 Variable selling and administrative expense per.
5 Views
View Answer
51) Andréa's Bakery produces frozen pizzas, which it sells for $12 each. The company uses the FIFO inventory costing method and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The.
5 Views
View Answer
26) Veron Corporation  is considering building a new plant in Europe.  They predict sales at the new plant to be 100,000 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 a.
6 Views
View Answer
30) Warm Hands sells three styles of heated gloves for motorcycle enthusiasts; Basic, Premium, and Platinum. The following information is taken from Warm hands budget for the upcoming year: PRODUCT UNIT SALES UNIT PRICE UNIT VARIABLECOSTS BASIC 6,000 $125 $75 PREMIUM 3,000 $200 $100 PLATINUM 1,000 $300 $150 Fixed costs are expected to be $731,250. The weighted average contribution margin for the three products of Warm Hands is: A) $90 B).
4 Views
View Answer
16) Which of the following would not be considered a company with high operating leverage? A) Hotel B) Golf course C) Theme park D) Retailer 17) Total predicted sales (in units) minus total break-even sales in units divided by total predicted sales (in units) yields: A) contribution margin ratio. B) contribution margin per unit. C) margin of safety.
11 Views
View Answer
11) Which of the following best describes "contribution margin per unit"? A) Sales price per unit minus fixed cost per unit B) Sales price per unit minus fixed and variable costs per unit C) Sales price per unit minus variable cost unit D) Units sold time contribution margin ratio 12) Expected future data that differs.
8 Views
View Answer
53) Checkerbox Company has a predicted operating income of $84,000 (as a targeted fixed cost).  Their total variable expenses are $24,000 and their total fixed expenses are $30,000.  They have a unit contribution margin of $10. a.  Calculate the required sales in units to achieve the predicted operating income. b.  Calculate the.
5 Views
View Answer
48) The following data is related to sales and production of the Welch Corporation for last year. Selling price per unit $50.00 Variable manufacturing cost per unit $24.00 Variable selling and administrative expense per unit $4.00 Fixed manufacturing overhead (in total) $50,000 Fixed selling and administrative expenses (in total) $8,000 Units.
6 Views
View Answer
21) All of the following are relevant to the decision to replace equipment EXCEPT the: A) cost of new equipment. B) selling price of old equipment. C) future maintenance costs of old equipment. D) cost of old equipment. 22) In making a short-term special decision, which of the following is MOST important? A) Separate variable from.
8 Views
View Answer
41) During the past year, Pettay Enterprises had the following fixed costs: Fixed manufacturing costs $112,000 Fixed marketing costs $43,000 Fixed administrative costs $18,000 The company also had the following variable costs: Variable manufacturing costs $142,000 Variable marketing costs $37,000 Variable administrative costs $28,000 During the year, the company produced and sold 60,000 units of the product at a selling price of $7.00 per.
5 Views
View Answer
61) Checkerbox Company has a predicted operating income of $97,500. Their total variable expenses are $42,000 and their total fixed expenses are $96,000.  They have a unit contribution margin of $15. a.  Calculate the required sales in units to achieve the predicted operating income.. b.  Calculate the required sales in units to achieve.
5 Views
View Answer
62) Checkerbox Company has a predicted operating income of $34,800 .  Their total variable expenses are $28,000 and their total fixed expenses are $22,800.  They have a unit contribution margin of $12. a.  Calculate the required sales in units to achieve the predicted operating income. b.  Calculate the required sales in units.
6 Views
View Answer
52) Menno Company manufactures coffee tables. The following data is related to sales and production of the tables for last year. Selling price per unit $450.00 Variable manufacturing costs per unit $200.00 Variable selling and administrative expenses per unit $27.00 Fixed manufacturing overhead (in total) $135,000 Fixed selling and administrative expenses.
7 Views
View Answer
48) Marietta Piping Corporation provides the following information about its single product. Targeted operating income $60,000 Selling price per unit $120.00 Variable cost per unit $45.00 Total fixed cost $90,000 What is the breakeven point in units? A) 545 B) 1,200 C) 800 D) 364 49) Marietta Piping Corporation provides the following information about its single product. Targeted operating income $60,000 Selling price per unit $120.00 Variable cost per.
5 Views
View Answer
39) Creative Cravat neckties sell for $75 each. Unit variable expenses total $50. The breakeven sales in units is 4000 and budgeted sales in units is 9,600. What is the margin of safety in dollars? A) $280,000 B) $420,000 C) $300,000 D) $100,000 40) Ava's Fruit Cups has a monthly target operating income of $5,425..
8 Views
View Answer
50) Andréa's Bakery produces frozen pizzas, which it sells for $10 each. The company uses the FIFO inventory costing method and it computes a new monthly fixed manufacturing overhead rate based on the actual number of meals produced that month. All costs and production levels are exactly as planned. The.
4 Views
View Answer