ACC 202 Exam 2 Break-Out Questions

Selling Price: $141 Units in beginning inventory 0 Units Produced 6,200 Units Sold 5,900 Units in ending inventory 300 Variable costs per unit: Direct Materials $40 Direct Labor $47 Variable Manufacturing Overhead $4 Variable Sell and Admin $7 Fixed Costs: Fixed MO $167,400 Fixed Sell and Admin $82,600 What is the net operating income for the month under absorption costing?

$11,800

Selling Price: $141 Units in beginning inventory 0 Units Produced 6,200 Units Sold 5,900 Units in ending inventory 300 Variable costs per unit: Direct Materials $40 Direct Labor $47 Variable Manufacturing Overhead $4 Variable Sell and Admin $7 Fixed Costs: Fixed MO $167,400 Fixed Sell and Admin $82,600 What is the unit product cost for the month under absorption costing?

$118

Stryker Corporation has two major business segments-East and West. In April, the East business segment had sales revenues of $500,000, variable expenses of $280,000, and traceable fixed expenses of $80,000. During the same month, the West business segment had sales revenues of $970,000, variable expenses of $514,000, and traceable fixed expenses of $184,000. The common fixed expenses totaled $280,000 and were allocated as follows: $112,000 to the East business segment and $168,000 to the West business segment. A properly constructed segmented income statement in a contribution format would show that the net operating income of the company as a whole is:

$132,000

Stryker Corporation has two major business segments-East and West. In April, the East business segment had sales revenues of $500,000, variable expenses of $280,000, and traceable fixed expenses of $80,000. During the same month, the West business segment had sales revenues of $970,000, variable expenses of $514,000, and traceable fixed expenses of $184,000. The common fixed expenses totaled $280,000 and were allocated as follows: $112,000 to the East business segment and $168,000 to the West business segment. A properly constructed segmented income statement in a contribution format would show that the segment margin of the East business segment is

$140,000

Contribution Margin Ratio: 0.4 Fixed Expenses: $80,000 Calculate the break-even profit

$200,000

Costs: Wages and salaries $260,000 Depreciation $220,000 Utilities $140,000 Total $620,000 Assembly (Activity Cost Pools) Wages and Salaries 50% Depreciation 20% Utilities 25% How much cost, in total, would be allocated in the first-stage allocation to the Assembly activity cost pool?

$209,000

Selling Price: $141 Units in beginning inventory 0 Units Produced 6,200 Units Sold 5,900 Units in ending inventory 300 Variable costs per unit: Direct Materials $40 Direct Labor $47 Variable Manufacturing Overhead $4 Variable Sell and Admin $7 Fixed Costs: Fixed MO $167,400 Fixed Sell and Admin $82,600 What is the net operating income for the month under variable costing?

$3,700

Selling price $25 per unit Variable expenses $15 per unit Fixed expenses $8,500 per month Unit sales 1,000 units per month Compute the margin of safety

$3,750

Last month when Harrison Creations, Inc., sold 40,000 units, total sales were $300,000, total variable expenses were $240,000, and fixed expenses were $45,000. Estimate the change in the company's net operating income if it were to increase its total sales by $1,500

$300

Stryker Corporation has two major business segments-East and West. In April, the East business segment had sales revenues of $500,000, variable expenses of $280,000, and traceable fixed expenses of $80,000. During the same month, the West business segment had sales revenues of $970,000, variable expenses of $514,000, and traceable fixed expenses of $184,000. The common fixed expenses totaled $280,000 and were allocated as follows: $112,000 to the East business segment and $168,000 to the West business segment The contribution margin of the West business segment

$456,000

Campbell Company's single product has a selling price of $10 per unit. Last year the company reported total variable expenses of $180,000, fixed expenses of $90,000, and a net operating income of $30,000. A study by the sales manager discloses that a 15% increase in the selling price would reduce unit sales by 10%. If her proposal is adopted, net operating income would be

$58,500

Liman Corporation has a single product whose selling price is $140 and whose variable expense is $60 per unit. The company's monthly fixed expense is $40,000 Using the formula method, determine for the dollar sales that are required to earn a target profit of $8,000

$84,000

Selling Price: $141 Units in beginning inventory 0 Units Produced 6,200 Units Sold 5,900 Units in ending inventory 300 Variable costs per unit: Direct Materials $40 Direct Labor $47 Variable Manufacturing Overhead $4 Variable Sell and Admin $7 Fixed Costs: Fixed MO $167,400 Fixed Sell and Admin $82,600 What is the unit product cost for the month under variable costing?

$91

Maxson Products distributes a single product, a woven basket whose selling price is $8 and whose variable cost is $6 per unit. The company's monthly fixed expense is $5,500. Compute for the company's break-even point in unit sales using the formula method.

2,750 baskets

Maxson Products distributes a single product, a woven basket whose selling price is $8 and whose variable cost is $6 per unit. The company's monthly fixed expense is $5,500. Compute for the company's break-even point in unit sales using the equation method

2,750 baskets

Last month when Harrison Creations, Inc., sold 40,000 units, total sales were $300,000, total variable expenses were $240,000, and fixed expenses were $45,000. What is the company's contribution margin (CM) ratio?

20%

Sales $120,000 100% Variable expenses 84,000 70% Contribution margin 36,000 30% Fixed expenses 24,000 Net operating income $ 12,000 Compute the company's degree of operating leverage.

3

Sales $120,000 100% Variable expenses 84,000 70% Contribution margin 36,000 30% Fixed expenses 24,000 Net operating income $ 12,000 Using the degree of operating leverage, estimate the impact on net operating income of a 10% increase in sales

30%

Liman Corporation has a single product whose selling price is $140 and whose variable expense is $60 per unit. The company's monthly fixed expense is $40,000 Using the equation method, determine the unit sales that are required to earn a target profit of $6,000.

575 units

Maxson Products distributes a single product, a woven basket whose selling price is $8 and whose variable cost is $6 per unit. The company's monthly fixed expense is $5,500. Compute for the company's break-even point in sales dollars using the equation method and the CM ratio.

CM ratio= 0.25 Break-even in dollars= $22,000

Maxson Products distributes a single product, a woven basket whose selling price is $8 and whose variable cost is $6 per unit. The company's monthly fixed expense is $5,500. Compute for the company's break-even point in sales dollars using the formula method and the CM ratio.

CM ratio= 0.25 Break-even in dollars= $22,000