mid term accounting

Question 1 1 / 1 pointRenting a scooter and paying $30 per day plus $.20 per mile driven is an example of what type of cost?

A) Mixed cost B) Variable cost C) Conversion cost D) Fixed cost

Question 2 1 / 1 pointTotal fixed costs for Randolph Manufacturing are $754,000. Total costs, including both fixed and variable, are $1,000,000 if 150,000 units are produced. The fixed cost per unit at 188,500 units would be closest to

A) $4.00/unit. B) $5.31/unit. C) $5.03/unit. D) $1.31/unit.

View FeedbackQuestion 3 0 / 1 pointTotal costs for Locke & Company at 120,000 units are $289,000, while total fixed costs are $145,000. The total variable costs at a level of 250,000 units would be

A) $602,083. B) $138,720. C) $302,083. D) $300,000.

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Cost Equation y = vx + f$289,000 = 120,000x + $145,000X = 1.20Then $1.20 × 250,000 = $300,000Question 4 1 / 1 pointIf production increases by 30%, how will total variable costs likely react?

A) Increase by 15% B) Decrease by 30% C) Increase by 30% D) Remain the same

Question 5

1 / 1 point

If a company's overhead cost equation is y = $8.80x + $120,020. The "x" is A) the variable costs.

B) total fixed costs. C) the cost driver in units. D) total overhead costs.

Question 6

1 / 1 point

In the equation y = $11.75x + $550, A) $550 are the total variable costs. B) $550 are the total step costs. C) $550 are the total overhead costs. D) $550 are the total fixed costs.

Question 7

1 / 1 point

Best Birdies produces ornate birdcages. The company's average cost per unit is $18.00 at a production level of 2,200 birdcages. What is the total cost of producing 2,200 birdcages?

A) $122 B) $2,218 C) $18.00 D) $39,600

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$18 × 2,200 = $39,600$18 × 2,200 = $39,600Question 8 1 / 1 pointThe Akron Slugger Company produces various types of wooden baseball bats. It has calculated the average cost per unit of a production level of 7,500 bats to be $10.00. If $22,500 of the total costs are fixed, what is the variable cost of producing each bat?

A) $7.00 B) $3.00 C) $52,500 D) $10.00

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Total cost = $10 × 7,500 = $75,000$75,000 = Variable cost per unit (7,500 ) + $22,500$7.00 = Variable cost per unitTotal cost = $10 × 7,500 = $75,000$75,000 = Variable cost per unit (7,500 ) + $22,500$7.00 = Variable cost per unitQuestion 9 0 / 1 pointSea Side Enterprises is trying to predict the cost associated with producing its anchors. At a production level of 5,000 anchors, Sea Side Enterprises average cost per anchor is $52.00. If $15,000 of the costs are

fixed, and the plant manager uses the average cost per unit to predict total costs, her forecast for 6,000 anchors will be

A) $312,000. B) $260,000. C) $309,000. D) $52,000.

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$52 × 6,000 = $312,000Question 10 1 / 1 pointTasty Treats is a snow cone stand near the local park. To plan for the future, Tasty Treats wants to determine its cost behavior patterns. It has the following information available about its operating costs and the number of snow cones served.

Month Number of snow cones Total operating costsJanuary 6,400 $5,980February 7,000 $6,400March 6,200 $5,840April 6,900 $6,330May 7,600 $6,820June 7,250 $6,575

The variable cost per snow cone using the high-low method is A) $0.90. B) $0.94. C) $0.70. D) $1.43.

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Highest cost $6,820 Highest activity 7,600 Lowest cost $5,840 Lowest activity 6,200Difference $980 1,400

NOW divide the difference in the cost by the difference in the activity equals Variable cost per unit. $980/1,400 = $ .70Highest cost $6,820 Highest activity 7,600 Lowest cost $5,840 Lowest activity 6,200Difference $980 1,400

NOW divide the difference in the cost by the difference in the activity equals Variable cost per unit. $980/1,400 = $ .70Question 11 0 / 1 pointJones Ice Cream Stand is operated by Mr. Jones and experiences different sales patterns throughout the year. To plan for the future, Mr. Jones wants to determine its cost behavior patterns. He has the following information available about the ice cream stand's operating costs and the number of soft serve cones served.

Month Number of ice cream cones Total operating costsApril 800 $950 May 825 $975 June 1,125 $1,000 July 2,000 $1,250 August 1,500 $1,875 September 900 $1,500

Using the high-low method, the monthly operating costs–if Mr. Jones sells 1,436 ice cream cones in a month–are

A) $859. B) $750. C) $359. D) $1,109.

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Highest cost $1,250 Highest activity 2,000 Lowest cost $950 Lowest activity 800Difference $300 1,200

NOW divide the difference in the cost by the difference in the activity equals Variable cost per unit. $300/1,200 = $ .25

Put the numbers into the Cost Equation: $1,250 = $ .25 (2000) + f$750 = f

Finish the equation: y = $ .25 (1,436) + 750y = $1,109Question 12 0 / 1 pointTo follow is information about the units produced and total manufacturing costs for Pine Enterprises for the past six months.

Month Number of units produced Total manufacturing costsJanuary 7,800 $8,150February 7,500 $8,000March 6,600 $7,550April 6,800 $7,650May 4,500 $6,500June 7,000 $7,750

Using the high-low method, what will the total monthly manufacturing costs be if the company produces 9,000 units?

A) $8,400 B) $4,500 C) $4,250 D) $8,750

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Highest cost $8,150 Highest activity 7,800 Lowest cost $6,500 Lowest activity 4,500Difference $1,650 3,300

NOW divide the difference in the cost by the difference in the activity equals Variable cost per unit. $1,650/3,300 = $ .50

Put the numbers into the Cost Equation: $8,150 = $.50 (7,800) + f$4,250 = f

Finally y = $ .50 (9,000) + $4,250y = $8,750Question 13 0 / 1 pointThe managerial accountant at Flat Screen Manufacturing reported that the organization contains an automated production line to manufacture and produce its products for consumers to enjoy in the marketplace. The managerial accountant reported that the company uses the high-low method to estimate the costs in the new budget. The managerial accountant reported the following information:

Month Total Machine-Hours Total CostsJanuary 250,000 $5,500,000February 248,000 $5,260,000March 249,000 $5,400,000April 248,000 $5,220,000May 238,000 $5,180,000June 230,000 $5,130,000

a. Compute the slope of the mixed cost, or the variable cost per unit of activity.b. Compute the vertical intercept, or the fixed cost component of the mixed cost.c. What is the mixed cost equation?

Answer:

(Slope of the mixed cost, variable cost per unit: $5,500,000 - $5,130,000 = $370,000 250,000 - 230,000 = 20,000 $370,000 / 20,000 = $18.50 variable cost per unit (slope of the mixed cost) y = vx + f $5,500,000 = ($18.50 × 250,000) + f f = $875,000 y = $18.50x + $875,000)

Question 14

0 / 1 point

Your client's company wants to determine the relationship between its monthly operating costs and a potential cost driver. The output of regression analysis showed the following information:

Intercept Coefficient = 89,500X Variable 1 Coefficient = 62.50R-square = 0.9855

What is the company's monthly cost equation? A) y = $98.55x + $89,500 B) y = $89,500x + $98.55 C) y = $62.50x + $89,500 D) y = $89,500x + $62.98

Question 15

0 / 1 point

Checak Incorporated wanted to determine the relationship between its monthly operating costs and a potential cost driver, machine hours. The output of a regression analysis showed the following information (note: only a portion of the regression analysis results is presented here):

What is closest to the total cost if the firm uses 6,000 machine hours? A) $1,365.59 B) $14,729,732.60 C) $7,257.49 D) $6,538.90

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y = .71859 (6,000) + $2,945.95y = $7,257.49Question 16 0 / 1 pointThe managerial accountant at the Bookcase Factory prefers regression analysis to the high-low method because it is a more accurate method. The managerial accountant uses regression output and analyzes the following data to predict future costs:

y =$250x + $625

where,

y = total monthly utility costx = number of guests

What is the intercept coefficient, or the vertical intercept of the fixed cost line, in the equation listed above?

A) $250x + $625 B) $625 C) y D) $250x

Question 17

0 / 1 point

How is operating income affected if the number of units sold exceeds the number of units produced?

A) Operating income would be higher under a variable costing income statement.

B) Operating income would be the same under both a variable costing and absorption costing income statement.

C) Operating income would be higher under an absorption costing income statement.

D) Operating income would be lower under a variable costing income statement.

Question 18

0 / 1 point

It costs Homer's Manufacturing $0.75 to produce baseballs and Homer sells them for $4.00 a piece. Homer pays a sales commission of 5% of sales revenue to his sales staff. Homer also pays $12,000 a month rent for his factory and store, and also pays $75,000 a month to his staff in addition to the commissions. Homer sold 67,500 baseballs in June. If Homer prepares a contribution margin income statement for the month of June, what would be his contribution margin?

A) $334,125

B) $205,875 C) $270,000 D) $64,125

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Sales $4 × 67,500 = $270,000Less: Variable costs $ 0.75 × 67,500 = $ 50,625Commission $275,000 × 5% = $ 13,500Contribution Margin $ 205,875Question 19 0 / 1 pointJeans's Fitness Club provides monthly memberships as well as personal training sessions. The personal trainers earn 50% of the revenue for all personal training sessions. The Fitness Club also sells nutrition products. Jeans's general ledger accounts indicate the following for the year. The front desk staff wages expense remains the same throughout the year.

Account Amount Account Amount

Membership revenue $140,000 Personal trainer wages expense ?

Personal training revenue $75,000 Space rental expense $11,000

Product sales $65,000 Straight line depreciation expense $6,000

Cost of product sold $35,000 Rental insurance expense $3,000Front desk staff wages expense $12,000

If a contribution margin income statement is prepared for the year, what is the contribution margin?

A) $72,500 B) $352,500 C) $207,500 D) $280,000

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Membership $140,000Personal Training 75,000Product Sales 65,000Total Revenue 280,000LESS:Variable expense 35,000Personal Trainer commissions $60,000 × 50% 37,500Contribution Margin $207,500Question 20 0 / 1 pointNeon Company manufactures widgets. The following data is related to sales and production of the widgets for last year.

Selling price per unit $130.00Variable manufacturing costs per unit $62.00

Variable selling and administrative expenses per unit $5.00Fixed manufacturing overhead (in total) $30,000Fixed selling and administrative expenses (in total) $8,000Units produced during the year 1,500Units sold during year 1,100

Using absorption costing, what is gross profit for last month? A) $233,200 B) $143,000 C) $104,800 D) $52,800

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Fixed MOH $30,000 divided by units produced 1,500 = $20 Fixed MOHAdd Variable manufacturing cost 62= Total Manufacturing cost $82× 1,100 sales= $90,200 Cost of goods sold

So: Sales $130 × 1100 = $143,000Less Cost of Goods Sold 90,200Equals Gross Profit $52,800Question 21 0 / 1 pointThe HF Corporation manufactures and sells toy gyroscopes. The following data is related to sales and production of the toy gyroscopes for last year.

Selling price per unit $8.00Variable manufacturing costs per unit $1.83Variable selling and administrative expenses per unit $4.45Fixed manufacturing overhead (in total) $75,000Fixed selling and administrative expenses (in total) $80,000Units produced during the year 500,000Units sold during the year 150,000

Using absorption costing, what is operating income for last year? A) $1,650,500 B) $155,500 C) $1,200,000 D) $749,500

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Fixed MOH $75,000 divided by units produced 500,000 = $0.15 Fixed MOHAdd Variable manufacturing cost 1.83= Total Manufacturing cost 1.98× 150,000 sales= $297,000 Cost of goods sold

So: Sales $8 × 150,000 = $1,200,000Less Cost of Goods Sold 297,000Equals Gross Profit $903,000Less Variable selling 667,500Less fixed selling 80,000Operating Income $155,500Question 22 0 / 1 pointMom and Pop's Ice Cream Shoppe sells ice cream cones for $5.00 per customer. Variable costs are $2.25 per cone. Fixed costs are $3,000 per month. What is the company's contribution margin per ice cream cone?

A) $0.55 B) $1.82 C) $2.25 D) $2.75

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Sales $5.00Less Variable costs 2.25= Contribution Margin 2.75 Question 23 0 / 1 pointThe Settler's Chuck Wagon sells tickets for dinner and a show for $50 each. The cost of providing dinner is $23 per ticket and the fixed cost of operating the theater is $115,000 per month. The company can accommodate 13,500 patrons each month. What is the projected monthly income if 5,500 patrons visit the theater each month?

A) $263,500 B) $33,500 C) $148,500 D) $249,500

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Sales $50Less Variable costs 23= Contribution Margin 27 × 5,500 = $148,500 Less fixed = 115,000Operating Income $33,500Question 24 0 / 1 pointThe following selected data relates to Ivory Corporation:

Total fixed costs $25,000Selling price per unit $22Variable costs per unit $15

If sales revenue per unit increases to $27 and 8,500 units are sold, what is the contribution margin?

A) $102,000 B) $59,500 C) $357,000 D) $77,000

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Sales $27Less Variable costs 15= Contribution Margin 12 × 8,500 = $102,000Question 25 0 / 1 pointDJ's T-Shirt Factory Contribution Margin

Sales price per T-Shirt $24Less: Variable cost per T-Shirt $15Unit contribution margin per T-Shirt $________

The managerial accountant at DJ's T-Shirt Factory reported the price per shirt is $24. The only variable cost is $15 per shirt. The managerial accountant also reported that the sales goals were increased to 1,000 shirts during the next quarter. First, compute the unit contribution margin per shirt. If fixed expenses are $8,000, what is the forecasted operating income if 1,000 shirts are sold in the next quarter?

A) 6; $700 B) 8; $900 C) 7; $800 D) 9; $1,000

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Unit contribution margin: $24 - $15 = $9Operating Income: 1,000 × 9 = $9,000 - $8,000 = $1,000Question 26 0 / 1 pointIf the selling price per unit is $10, the unit contribution margin is $5, and total fixed expenses are $15,000, what are the breakeven sales in units?

A) 1,500 B) 75,000 C) 150,000 D) 3,000

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Fixed Expenses $15,000 divided by Contribution Margin $5 = 3,000 BreakevenQuestion 27 0 / 1 pointMartin Enterprises provides the following information about its single product.

Targeted operating income $50,830Selling price per unit $6.55Variable cost per unit $4.25

Total fixed cost $94,070

How many units must be sold to earn the targeted operating income? A) 63,000 B) 22,100 C) 40,900 D) 13,417

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Sales $6.55Less Variable costs 4.25= Contribution Margin $2.30

Fixed expenses $94,070 + Target Income $50,830 = $144,900 divided by Contribution Margin $2.30 = 63,000 BE unitsQuestion 28 0 / 1 pointCedar Mills Incorporated desires an operating income of $72,000. Its variable expenses are $20,000 and its total fixed expenses have increased from $32,000 to $60,000. Its unit contribution margin is $10. Its sales in units to achieve the target profit is

A) 13,200. B) 15,200. C) 11,200. D) 1,200.

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Fixed expenses $60,000 + Target Income $72,000 = $132,000 divided by Contribution Margin $10 = 13,200 BE unitsQuestion 29 0 / 1 pointThe selling price of a Road King bicycle is $700, unit variable costs are $350, and total fixed costs are $12,600. How many bicycles will Road King need to sell to breakeven?

A) 18 B) 12 C) 25,200 D) 36

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Sales $700Less Variable costs 350= Contribution Margin $350

Fixed expenses $12,600 divided by Contribution Margin $350 = 36 BE unitsQuestion 30 0 / 1 pointThe managerial accountant at Boone Furriers reported the following contribution margin statement information:

Sales Revenue= $850 per unit × number of units sold

Variable Expenses = $205 per unit × number of units sold.

Fixed Expenses= $340,000

Operating Income=$0

Sales price per unit= $850

Variable cost per unit= $645 × units sold

Fixed expenses= $340,000

Operating Income= $0

NAVariable cost per unit$645 × units sold

NAOperating Income= Fixed expenses= $645

NA Units Sold NA Fixed Expenses / Variable cost per unit

NA Sales in Units NAX number of units necessary to reach the breakeven point.

Use the data listed above to compute the following:a. Compute the sales in units.b. Compute the breakeven point in sales revenue.

A) 528 units; $448,800 B) 650 units; $525,000 C) 1,659 units; $338,900 D) 323 units; $512,000

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Sales per unit: = $850 - $205 = $645; $340,000 / $645 = 527.13 ~ 528 unitsBreakeven point: Fixed Expenses = 528 units × $850 = $448,800 is the breakeven point in sales revenueQuestion 31 0 / 1 pointMonroe Manufacturing produces and sells a product with a price of $100/unit. The following data has been prepared for its estimated upper and lower levels of activity.

Production Category Lower Limit Upper LimitUnits of Production 4,000 units 6,000 unitsDirect Materials $60,000 $90,000Direct Labor $80,000 $120,000Manufacturing Overhead:Indirect materials $25,000 $37,500Indirect labor $40,000 $50,000Depreciation $20,000 $20,000Selling and Admin. Expenses:Sales salaries $50,000 $65,000Office salaries $30,000 $30,000Advertising $45,000 $45,000Other $15,000 $20,000

Totals $365,000 $477,500

The fixed expenses for this company are A) indirect materials, indirect labor, and depreciation. B) sales salaries, office salaries, and advertising. C) direct materials, direct labor, and depreciation. D) depreciation, office salaries, and advertising.

Question 32

0 / 1 point

If the selling price per unit is $32, the variable expense per unit is $19.50, and the breakeven sales in dollars is $44,800, what are total fixed expenses?

A) $112 B) $17,500 C) $1,400 D) $28,718

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Sales $32.00Less Variable expenses 19.50Contribution Margin $12.50

Breakeven Sales 44,800 divided by Sales $32 × Contribution Margin $12.50 = $17,500Question 33 0 / 1 pointClaudia Enterprises has budgeted the following amounts for its next fiscal year:

Total fixed expenses $48,200Selling price per unit $60Variable expenses per unit $30

If Claudia Enterprises can reduce fixed expenses by $12,000, how will breakeven sales in units be affected? A) Decrease by 400 units B) Increase by 133 units C) Increase by 400 units D) Decrease by 133 units

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Sales $60.00 Less Variable expenses 30.00Contribution Margin $30.00

12,000 / $30 CM = 400 decrease in Break Even unitsQuestion 34 0 / 1 pointFranklin Producers sells its core product for $8 per unit and has variable costs of $6 per unit. Total fixed costs are $28,000. Suppose variable costs increase by 20% due to an increase in the cost of direct materials. What will be the effect on the breakeven point in units?

A) Decrease from 4,667 units to 3,889 units B) Decrease from 14,000 units to 4,118 units C) Increase from 14,000 units to 35,000 units D) Decrease from 2,000 units to 1,842 units

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Sales $8.00 Less Variable expenses 6.00Contribution Margin $2.00Fixed expense $28,000/ $2.00 CM = 14,000 BE unitsSales $8.00 Less Variable expenses 7.20Contribution Margin $ 0.80Fixed expense $28,000/ $0.80 CM = 35,000 BE unitsQuestion 35 0 / 1 pointGabe Industries sells two products, Basic models and Deluxe models. Basic models sell for $42 per unit with variable costs of $30 per unit. Deluxe models sell for $50 per unit with variable costs of $40 per unit. Total fixed costs for the company are $75,400. Gabe Industries typically sells four Basic models for every Deluxe model. What is the breakeven point in total units?

A) 3,900 units B) 9,921 units C) 5,953 units D) 6,500 units

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Basic Deluxe TotalSales $42 $50Variable Costs 30 40Contribution Margin 12 10× Sales Mix 4 1 5Contribution margin $48 $10 $58

Contribution Margin $58 / 5 Sales Mix = $11.60 Weighted CM

Fixed costs $75,400 / 11.60 = 6,500 BE unitsQuestion 36 0 / 1 pointJackie's Creamery sells fudge, cookies, and popcorn to patrons in the local community. The manager at the creamery sold 12,000 total boxes of merchandise last year. The popcorn outsold fudge by a margin of 2 to 1. The sales of caramels equaled the sales of popcorn. Total fixed costs for Jackie's Creamery total $14,000. The managerial accountant at Jackie's Creamery reported the following information:

Product Unit Sales Prices Unit Variable CostFudge $5.00 $4.00Caramels $8.00 $5.00Popcorn $6.00 $4.00

Which formula should the managerial accountant use to determine the number of boxes of each different snack sold?

A) 3x + 2x + x = 12,000 B) x + y + z = 12,000 C) x + 2x + 2x = 12,000 D) none of the above

Question 37

0 / 1 point

I Scream For Ice Cream sells specialty ice cream in three flavors: Rocky Road, Peanut Butter, and Fruity Tooty. It sold 15,000 gallons last year. For every five gallons of ice cream sold, one pound is Fruity Tooty and the remainder is split evenly between Peanut Butter and Rocky Road. Fixed costs for I Scream For Ice Cream are $27,000 and additional information follows:

Rocky Road Peanut Butter Fruity TootySales price per pound $5.50 $4.00 $3.50 Variable cost per pound $3.00 $2.00 $2.50

The sales mix percentage of Fruity Tooty based upon pounds is A) 40%. B) 75%. C) 71%. D) 20%.

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Rocky Road 2Peanut Butter 2Fruity Tooty 1Total 5

Sales mix Peanuts 1/5 = 20%Question 38 0 / 1 pointMatthew's Fish Fry has a monthly target operating income of $7,200. Variable expenses are 60% of sales and monthly fixed expenses are $1,800. What is the monthly margin of safety in dollars if the business achieves its operating income goal?

A) $27,000 B) $22,500 C) $13,500 D) $18,000

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Monthly fixed expense $1,800Targeted operating income 7,200Contribution margin 9,000 divided by Contribution margin % 40% (1- variable expense of 60%)Targeted income = 22,500 (11,200 / 40%)Less Breakeven 4,500 (fixed expense 1,800 / 40% CM)Margin Safety dollars 18,000Question 39 0 / 1 pointTom's Taxidermy has a monthly target operating income of $25,000. Variable expenses are 75% of sales and monthly fixed expenses are $15,000. What is Tom's operating leverage factor at the target level of operating income?

A) 2.67 B) 0.63 C) 0.40 D) 1.60

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Target income 25,000+ Fixed expense 15,00040,000Divided by target Inc. 25,000Operating leverage = 1.60Question 40 0 / 1 pointFancy Furniture has variable expenses of 40% of sales and monthly fixed expenses of $240,000. The monthly target operating income is $60,000. What is the monthly margin of safety in dollars if Fancy Furniture achieves its operating income goal?

A) $500,000 B) $100,000 C) $900,000 D) $(300,000)

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Fixed expenses 240,000Target income 60,000300,000Contribution margin 60% (Variable expense of 40%)Target sales 500,000

Fixed expense 240,000Contribution margin 60%Breakeven sales 400,000(240,000 / .60)

Target sales 500,000- Breakeven sales 400,000Margin safety 100,000Question 41 0 / 1 pointGarfield Corporation is considering building a new plant in Canada. It predicts sales at the new plant to be 50,000 units at $5.00/unit. Below is a listing of estimated expenses:

CategoryTotal Annual

Expenses% of Annual Expense

that are FixedMaterials $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 commission of 10% of the sales price. No U.S. home office expenses will be allocated to the new facility.

The unit variable cost for Garfield Corporation is A) $4.50. B) $3.60. C) $1.40. D) $3.10.

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Question 42 0 / 1 pointComfort Cloud manufactures seats for airplanes. The company has the capacity to produce 100,000 seats per year, but is currently produces and sells 75,000 seats per year. The following information relates to current production of seats:

Sale price per unit $400

Variable costs per unit:

Manufacturing $220Marketing and administrative $50

Total fixed costs:Manufacturing $750,000Marketing and administrative $200,000

If a special sales order is accepted for 6,500 seats at a price of $325 per unit, and fixed costs remain unchanged, how would operating income be affected? (NOTE: Assume regular sales are not affected by the special order.)

A) Increase by $5,500,000 B) Increase by $2,112,500 C) Increase by $357,500 D) Decrease by $357,500

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Variable Mfg. Cost $220Variable Marketing $50Total Variable $270

NOW Sales Price $325Less Total Variable Cost 270= Contribution Margin $55

Times units sold × 6,500= Additional Profit $357,500Question 43 0 / 1 pointSamson Incorporated provided the following information regarding its only product:

Sale price per unit $50.00Direct materials used $160,000Direct labor incurred $185,000Variable manufacturing overhead $120,000

Variable selling and administrative expenses $70,000Fixed manufacturing overhead $65,000Fixed selling and administrative expenses $12,000Units produced and sold 20,000

Assume no beginning inventory

Assuming there is excess capacity, what would be the effect on operating income of accepting a special order for 3,000 units at a sale price of $45 per product assuming additional fixed manufacturing overhead costs of $5,000 is incurred? (NOTE: Assume regular sales are not affected by the special order.)

A) Increase by $54,750 B) Increase by $135,000 C) Decrease by $49,750 D) Increase by $49,750

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Direct Materials $160,000Direct Labor 185,000Variable Mfg. O/H 120,000Variable Selling 70,000Total Mfg. Cost $535,000 / units produced 20,000 = $26.75 Mfg. cost per unit

ThenSales Price $45.00Less Mfg. cost per Unit 26.75= Contribution Margin $18.25Times units sold × 3,000Total Contribution Margin =$54,750Less Add'l Fixed cost - 5,000Add'l Profit 49,750Question 44 0 / 1 pointPluto Incorporated provided the following information regarding its single product:

Direct materials used $240,000Direct labor incurred $420,000Variable manufacturing overhead $160,000Fixed manufacturing overhead $100,000Variable selling and administrative expenses $60,000Fixed selling and administrative expenses $20,000

The regular selling price for the product is $80. The annual quantity of units produced and sold is 40,000 units (the costs above relate to the 40,000 units production level). The company has excess capacity and regular sales will not be affected by this special order. There was no beginning inventory.

What would be the effect on operating income of accepting a special order for 3,500 units at a sale price of $55 per product?

A) Increase by $115,500 B) Decrease by $115,500 C) Decrease by $269,500 D) Increase by $269,500

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Direct Materials $240,000Direct Labor 420,000Variable Overhead 160,000Variable Selling 60,000Total $880,000

Total $880,000Divided by production 40,000Cost per unit $22.00

Selling Price $55.00Less cost per unit 22.00Contribution Margin $33.00× units sold × 3,500Operating Income $115,500Question 45 0 / 1 pointElite Office Furniture received a special order for 1,200 units of its executive chairs at a selling price of $90 per chair. Elite Office Furniture has enough capacity to accept the order. No additional selling costs will be incurred. Unit costs to make and sell this product are as follows: Direct Materials $45; Direct Labor $19; Variable Manufacturing Overhead $6; Fixed Manufacturing Overhead $12; and Variable Selling Costs $5.

What will be Elite Office Furniture's change in operating income if they accept the special order? Should Elite Office Furniture accept the order? Explain why or why not.

- No text entered -This question has not been graded.The correct answer is not displayed for Long Answer type questions.Question 46 0 / 1 pointPhiladelphia Swim Club is planning for the coming year. Investors would like to earn a 10% return on the company's $30 million of assets. The company primarily incurs fixed costs to maintain the swimming pools. Fixed costs are projected to be $12,500,000 for the year. About 500,000 members are expected to swim each year. Variable costs are about $10 per swimmer. Philadelphia Swim Club is a price-taker and won't be able to charge more than its competitors who charge $37.00 for a membership. What profit will it earn in terms of dollars?

A) $11,000,0

00

B) $1,000,000

C) $(1,000,000)

D) $(12,500,000)

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Question 47 0 / 1 pointGreen Pastures golf course is planning for the coming season. Investors would like to earn a 12% return on the company's $40 million of assets. The company primarily incurs fixed costs to groom the greens and fairways. Fixed costs are projected to be $20 million for the golfing season. About 500,000 golfers are expected each year. Variable costs are about $12 per golfer. Green Pastures golf course is a price-taker and won't be able to charge more than $60 per round because of local competition.

What will Green Pasture's expected profit shortfall be if it charges $60/round?- No text entered -

This question has not been graded.The correct answer is not displayed for Long Answer type questions.Question 48 0 / 1 pointContribution margin income statement data for the most recent year follow:

Total Cat Food Dog Food

Sales revenue $385,000 $300,000 $85,000Variable expenses $205,000 $165,000 $40,000Contribution margin $180,000 $135,000 $45,000Fixed expenses $102,000 $50,000 $52,000Operating income (loss) $78,000 $85,000 $(7,000)

Assuming the Dog food is discontinued, total fixed costs remain unchanged, and the space formerly used to produce the line is rented for $25,000 per year, how will operating income be affected?

A)

Increase $184,000

B) Increase $20,000

C) Decrease $20,000

D) Increase $58,000

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Question 49 0 / 1 point

Mama's Favorite Appliances manufactures two products: Food Processors and Espresso Makers. The following data are available:

Food Processors Espresso MakersSales price $125 $225Variable costs $50 $150

The company can manufacture two food processors per machine hour and three espresso machines per machine hour. The company's production capacity is 1,200 machine hours per month.

What is the contribution margin ratio for food processors?

A) 150.00%

B) 33.33%

C) 140.00%

D) 60.00%

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Question 50 0 / 1 pointBrittany Furniture manufactures two products: Couches and Beds. The following data are available:

Couches BedsSales price $500.00 $700.00Variable costs $350.00 $375.00

The company can manufacture two couches per machine hour and one bed per machine hour. The company's production capacity is 900 machine hours per month.

What is the contribution margin ratio for Couches? A) 42.86%

B) 170.00%

C) 30.0%

D) 23.08%

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Question 51 0 / 1 pointBrittany Furniture manufactures two products: Futons and Recliners. The following data are available:

Futons ReclinersSales price $500.00 $480.00Variable costs $325.00 $120.00

The company can manufacture two futons per machine hour and one recliner per machine hour. The company's production capacity is 900 machine hours per month.

What is the contribution margin per machine hour for recliners? A) $600 B) $720 C) $360

D) $1,080

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Question 52 0 / 1 pointCuyahoga Valley Bicycles uses a standard part in the manufacture of several of its bikes. The cost of producing 40,000 parts is $138,000, which includes fixed costs of $68,000 and variable costs of $70,000. By outsourcing the part, the company can avoid 30% of the fixed costs.

If Cuyahoga Valley Bicycles buys the part, what is the most Cuyahoga Valley Bicycles can spend per unit so that operating income equals the operating income from making the part?

A) $2.26 B) $2.33 C) $4.64 D) $1.33

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Cost to Build Variable Costs $70,000 Fixed Costs 68,000 Total $138,000 Less Unavoidable Fixed Cost 47,600Adjusted Cost of part 90,400 Divided by 40,000 = $2.26Question 53 0 / 1 pointMoon Appliance manufactures a variety of appliances which all use Part B89. Currently, Moon Appliance manufactures Part B89 itself. It has been producing 9,000 units of Part B89 annually. The annual costs of producing Part B89 at the level of 9,000 units include:

Direct materials $3.00Direct labor $8.00Variable manufacturing overhead $4.00Fixed manufacturing overhead $3.00Total cost $18.00

All of the fixed manufacturing overhead costs would continue whether Part B89 is made internally or purchased from an outside supplier. Moon Appliance has no alternative use for its manufacturing facilities. Nadal Parts Company has offered to sell 9,000 units of Part B89 to Moon Appliance for $20.00 per unit. What is the highest price per unit that Moon Appliance should be willing to pay for the part?

A) $11 B) $18 C) $15 D) $7

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Direct Materials $3.00Direct Labor 8.00Variable MOH 4.00Total Variable Cost $15.00

Question 54 0 / 1 pointZach has the following information to evaluate—his current salary of $75,000 versus total revenues of $100,000 and expenses of $67,000 from starting a new business. How much is the opportunity cost associated with staying at his current job?

A) $33,000 B) $(8,000) C) $167,000 D) $75,000

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Revenues $100,000Expenses 67,000Potential income $33,000Question 55 0 / 1 pointStooge Enterprises manufactures ceiling fans that normally sell for $90 each. There are 300 defective fans in inventory, which cost $55 each to manufacture. These defective units can be sold as is for $20 each, or they can be processed further for a cost of $40 each and then sold for the normal selling price. Stooge Enterprises would be better off by a

A)

$9,000 net increase in operating income if the ceiling fans are sold as is.

B)

$21,000 net increase in operating income if the ceiling fans are repaired.

C) $21,000 net increase in

operating income if the ceiling fans are sold as is.

D)

$9,000 net increase in operating income if the ceiling fans are repaired.

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Question 56 0 / 1 pointCatNap Company has two products: Kittyz and Katz. A March sales forecast projects 20,000 units of Kittyz and 15,000 units of Katz are going to be sold at prices of $15 and $12, respectively. The desired ending inventory of Kittyz is 20% higher than the beginning inventory, which was 2,000 units. How much are total March sales for Kittyz anticipated to be?

A) $100,000 B) $180,000 C) $240,000 D) $300,000

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20,000 × $15 =

$300,000Question 57 0 / 1 pointRubino Corporation desires a December 31 ending inventory of 900 units. Budgeted sales for December are 2,650 units. The November 30 inventory was 850 units. What are budgeted purchases in units?

A) 4,400 B) 2,600 C) 2,700 D) 3,550

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Sales 2,650Less: BI 850= Need to produce 1,800+ desired EI 900= Total Production 2,700Question 58 0 / 1 pointFosnight Enterprises prepared the following sales budget:

Month Budgeted SalesMarch $6,000April $13,000May $12,000June $14,000

The expected gross profit rate is 30% and the inventory at the end of February was $10,000. Desired inventory levels at the end of the month are 20% of the next month's cost of goods sold.

What is the desired beginning inventory on June 1? A) $1,680 B) $9,800 C) $1,960 D) $840

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Sales = 100% - 30% Gross Profit = 70% Cost of Goods Sold (CGS)Now: June Sales $14,000 × 70% = 9,800 (CGS) × 20% = $1,960 Question 59 0 / 1 point

A lamp store purchased $3,800 of lamps in September. The store had $1,600 of lamps on hand at the beginning of September, and expected to have $1,300 of lamps at the end of September to cover part of anticipated October sales. What is the budgeted cost of goods sold for September?

A) $3,500 B) $5,400 C) $6,700 D) $4,100

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BI $1,600+ Purchases 3,800= Goods Available 5,400Less: EI 1,300= Cost of Goods Sold $4,100Question 60 0 / 1 pointVictoria Corporation manufactures quality vases. Budgeted sales and production data for the vases are as follows:

Month 1 budgeted unit sales 2,000Month 2 budgeted unit sales 2,500Month 3 budgeted unit sales 3,200Month 1 budgeted unit production 2,400Month 2 budgeted unit production 2,700Month 3 budgeted unit production 3,400Raw material required for each finished unit (in pounds) 1

The ending inventory for each month should be equal to 20% of the next month's production needs. Each vase requires one pound of clay in its manufacture. Victoria Corporation has a policy that the inventory of clay at the end of each month needs to be equal to 20% of the production needs for the following month. At the beginning of January, 480 pounds of clay were in inventory. How many pounds of clay would Victoria Corporation need to purchase in February (Month 2?

A) 2,660 B) 2,840 C) 2,940 D) 3,620

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Production Month 2 2,700Less BI (2,700 × 20%) - 540Plus EI (3,400 × 20%) + 680 Equals Purchases 2,840Question 61 0 / 1 pointNatcher Corporation collects 30% of a month's sales in the month of sale, 55% in the month following sale, and 10% in the second month following sale. The company has found that 5% of their sales are uncollectible. Budgeted sales for the upcoming four months are:

August budgeted sales $300,000September budgeted sales $280,000October budgeted sales $330,000November budgeted sales $260,000

The amount of cash that will be collected in November is budgeted to be A) $287,500. B) $78,000. C) $291,500. D) $283,000.

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Sept. Sales $280,000 × 10% = $28,000Oct. Sales 330,000 × 55% = 181,500Nov. Sales 260,000 × 30% = 78,000Total $287,500Question 62 0 / 1 pointPurchases in May were $60,000, while expected purchases for June and July are $75,000 and $92,000, respectively. All purchases are paid 35% in the month of

purchase and 65% in the following month. At what amount are June payments for purchases budgeted?

A) $69,750 B) $65,250 C) $97,450 D) $86,050

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May $60,000 × 65% = $39,000June 75,000 × 35% = 26,250Total $65,250Question 63 0 / 1 pointTwo Brothers Moving prepared the following sales budget:

Month Cash Sales Credit SalesMarch $20,000 $10,000April $36,000 $16,000May $42,000 $40,000June $54,000 $48,000

Credit collections are 25% in the month of sale, 60% in the month following the sale, and 10% two months following the sale. The remaining 5% is expected to be uncollectible.

What are the total cash collections in June at Two Brothers Moving? A) $37,600 B) $86,800 C) $91,600 D) $96,300

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June credit sales $48,000Credit collections month of sale 25%Collections from June credit sales $12,000

May credit sales $40,000Credit collections month after sale 60%

Collections from May credit sales $24,000

April credit sales $16,000Credit collections 2 months after sale 10%Collections from April credit sales $1,600

June cash sales $54,000Collections from June credit sales $12,000Collections from May credit sales $24,000Collections from April credit sales $1,600Total June cash collections $91,600Question 64 0 / 1 pointGoliath Company prepared the following purchases budget:

Month Budgeted PurchasesJune $35,600July $42,500August $39,600September $45,800October $49,400

All purchases are paid for as follows: 30% in the month of purchase, 45% in the following month, and 25% two months after purchase.

What are the cash disbursements in August to account for the June purchases at Goliath Company?

A) $20,610 B) $8,900 C) $16,020 D) $10,680

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$35,600 × 25% = $8,900Question 65 0 / 1 pointAssume the Air Conditioning division of the General Appliance Corporation had the following results last year (in thousands). Management's target rate of return is 15% and the weighted average cost of capital is 10%. Its effective tax rate is 35%.

Sales $10,000,000Operating income 2,000,000Total assets 2,500000

Current liabilities 820,000

What is the division's capital turnover? A) 5.00 B) 4.00 C) 1.25 D) 3.05

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Sales $10,000,000/Total assets 2,500,000 = 4.00Question 66 0 / 1 pointThe Box Manufacturing Division of the Allied Paper Company reported the following results from the past year. Shareholders require a return of 7%. Management calculated a weighted-average cost of capital (WACC) of 5%. Allied's corporate tax rate is 30%.

Sales $700,000Operating income $175,000Total assets $1,500000Current liabilities 600,000

What is the division's capital turnover? A) 8.57 B) 0.47 C) 4.00 D) 2,50

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Sales $700,000 / Total assets 1,500,000 = 0.47Question 67 0 / 1 pointCamden Corporation has operating income of $87,000, a sales margin of 15%, and capital turnover of 2.5. The return on investment (ROI) for Camden Corporation may be closest to

A) 2%. B) 107%. C) 38%. D) 6%.

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Operating income/Sales Margin = Sales87,000/15% = 580,000 Sales/Capital

Turnover = Total Assets580,000/2.5 = 232,000Operating income/Total Assets = ROI87,000/232,000 = 38%Question 68 0 / 1 pointDove Incorporated has operating income of $650,000, a sales margin of 10%, and a capital turnover rate of 2.0. What amount would Dove report for sales?

A) $1,300,000 B) $6,500,000 C) $325,000 D) $65,000

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Question 69 0 / 1 pointThe Top Hat Division of Blandon's Fine Menswear had the following results last year (in thousands).

Sales $4,500,000Operating income $675,000Total assets $3,000,000Current liabilities $250,000

Management's target rate of return is 12% and the weighted average cost of capital is 9%.

What is the Top Hat Division's Residual Income (RI)? A) $315,000 B) $225,000 C) $405,000 D) $135,000

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Target Return = Total Assets × Required Return360,000 = 3,000,000 × 12%

Residual Income = Operating Income - Target Return315,000 = 675,000 - 360,000Question 70 0 / 1 point

Selected financial data for The Portland Porcelain Works Coffee Mug Division is as follows:

Sales $2,300,000Operating income $414,000Total assets $718,750Current liabilities $180,000Target rate of return 10%Weighted average cost of capital 8%

What is The Portland Porcelain Works Coffee Mug Division residual income? A) $71,875 B) $342,125 C) $396,000 D) $356,500

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Residual income = Operating income - (Target rate of return × Total assets)= 414,000 - (10% × 718,750)= 414,000 - 71,875= 342,125Question 71 0 / 1 pointThe Southern Division of Amelia Corporation had sales of $6,500,000 and operating income of $1,200,000 last year. The total assets of the Southern Division were $3,000,000, while current liabilities were $450,000. Amelia Corporation's target rate of return is 10%, while its weighted average cost of capital is 6%. The effective tax rate for the company is 30%.

What is the Southern Division's Return on Investment (ROI)? A) 40.00% B) 6.00% C) 25.00% D) 200.00%

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Return on investment = Operating income/Total assets= 1,200,000/3,000,000 = 40%Question 72 1 / 1 pointA graph of a flexible budget formula reflects fixed costs of $45,000 per month and total costs of $100,000 at a volume of 5,000 units. Assuming the relevant range is 1,000 to 20,000 units, the graph would reflect total monthly costs at 15,000 units of what dollar amount?

A) $345,000 B) $165,000 C) $210,000 D) $100,000

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Total costs $100,000 Fixed costs $(45,000) Variable costs $55,000 Initial volume 5,000 Variable cost per unit $11 = 55,000 / 5,000

Variable cost per unit $11 Target units 15,000 Variable costs at target volume $165,000 = 15,000 × 11Fixed costs + 45,000 Total costs at target volume $210,000Total costs $100,000 Fixed costs $(45,000) Variable costs $55,000 Initial volume 5,000 Variable cost per unit $11 = 55,000 / 5,000

Variable cost per unit $11 Target units 15,000 Variable costs at target volume $165,000 = 15,000 × 11Fixed costs + 45,000 Total costs at target volume $210,000

Attempt Score:

9 / 72 - 12.5 %

Overall Grade (highest attempt):

9 / 72 - 12.5 %

mid term accounting

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