Accounting 202 CONNECT Ch. 5

Florek Inc. produces and sells a single product. The company has provided its contribution format income statement for March. Sales (5,700 units) $228,000 Variable expenses 131,100 Contribution margin 96,900 Fixed expenses 86,300 Net operating income $10,600 If the company sells 5,900 units, its net operating income should be closest to: $14,000 $10,600 $18,600 $10,972

$14,000

Spartan Systems reported total sales of $300,000, at a price of $20 and per unit variable expenses of $12, for the sales of their single product. Total Per Unit Sales $300,000 $20 Variable expenses 180,000 12 Contribution margin 120,000 $8 Fixed expenses 100,000 Net operating income $20,000 What is the amount of contribution margin if sales volume increases by 30%? $19,500 $15,000 $156,000 $120,000

$156,000

Ofarrell Corporation, a company that produces and sells a single product, has provided its contribution format income statement for March. Sales (5,000 units) $205,000 Variable expenses 125,000 Contribution margin 80,000 Fixed expenses 62,400 Net operating income $17,600 If the company sells 5,400 units, its net operating income should be closest to: $19,008 $17,600 $24,000 $34,000

$24,000

Bowe Corporation's fixed monthly expenses are $21,000 and its contribution margin ratio is 61%. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $74,000? $7,860 $45,140 $24,140 $53,000

$24,140

Maack Corporation's contribution margin ratio is 16% and its fixed monthly expenses are $44,000. If the company's sales for a month are $299,000, what is the best estimate of the company's net operating income? Assume that the fixed monthly expenses do not change. $207,160 $3,840 $255,000 $47,840

$3,840

Bolding Inc.'s contribution margin ratio is 61% and its fixed monthly expenses are $42,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $126,000? $76,860 $7,140 $34,860 $84,000

$34,860

At a break-even point of 800 units sold, White Corporation's variable expenses are $8,000 and its fixed expenses are $4,000. What will the Corporation's net operating income be at a volume of 801 units? $15 $10 $5 $20

$5

Brees Inc., a company that produces and sells a single product, has provided its contribution format income statement for April. Sales (6,200 units) $136,400 Variable expenses 80,600 Contribution margin 55,800 Fixed expenses 48,700 Net operating income $7,100 If the company sells 5,800 units, its total contribution margin should be closest to: $55,800 $52,200 $6,642 $47,000

$52,200

*Arthur Corporation has a margin of safety percentage of 25% based on its actual sales. The break-even point is $300,000 and the variable expenses are 45% of sales. Given this information, the actual profit is: $75,000 $55,000 $15,000 $41,250

$55,000

The records of the Dodge Corporation show the following results for the most recent year: Sales (16,000 units) $256,000 Variable expenses $160,000 Net operating income $32,000 Given these data, the unit contribution margin was: $16 $4 $2 $6

$6

Solen Corporation's break-even-point in sales is $900,000, and its variable expenses are 75% of sales. If the company lost $32,000 last year, sales must have amounted to: $868,000 $804,000 $772,000 $628,000

$772,000

Last year Easton Corporation reported sales of $720,000, a contribution margin ratio of 30% and a net loss of $24,000. Based on this information, the break-even point was: $640,000 $880,000 $744,000 $800,000

$800,000

Sales (4,400 units) $211,200 Variable expenses 127,600 Contribution margin 83,600 Fixed expenses 66,400 Net operating income $17,200 If the company sells 4,700 units, its total contribution margin should be closest to: $83,600 $18,373 $89,300 $98,000

$89,300

The contribution margin ratio is equal to: Total manufacturing expenses/Sales. (Sales − Variable expenses)/Sales. 1 − (Gross Margin/Sales). 1 − (Contribution Margin/Sales).

(Sales − Variable expenses)/Sales.

Minist Corporation sells a single product for $15 per unit. Last year, the company's sales revenue was $225,000 and its net operating income was $18,000. If fixed expenses totaled $72,000 for the year, the break-even point in unit sales was: 15,000 9,900 14,100 12,000

12,000

Garth Corporation sells a single product. If the selling price per unit and the variable expense per unit both increase by 10% and fixed expenses do not change, then: A) CM per Unit Increases CM ratio Increases Break-even in unites Decreases B) CM per unit: No change CM ratio: No change BE in units: No change C) CM per unit: No change CM ratio: Increases BE in units: No change D) CM per unit: Increases CM ratio: No change BE in units: Decreases

D

Assume a company sells a single product. If Q equals the level of output, P is the selling price per unit, V is the variable expense per unit, and F is the fixed expense, then the break-even point in sales dollars is: F/(P-V). F/[Q(P-V)]. F/[Q(P-V)/P]. F/[(P-V)/P].

F/[(P-V)/P].

The break-even in units sold will decrease if there is an increase in: unit sales volume. total fixed expenses. unit variable expenses. selling price.

selling price.

If a company decreases the variable expense per unit while increasing the total fixed expenses, the total expense line relative to its previous position will: shift downward and have a steeper slope. shift downward and have a flatter slope. shift upward and have a flatter slope. shift upward and have a steeper slope.

shift upward and have a flatter slope.

Which of the following is NOT a correct definition of the break-even point? the point where total sales equals total expenses. the point where total profit equals total fixed expenses. the point where total contribution margin equals total fixed expenses. the point where total profit equals zero.

the point where total profit equals total fixed expenses.

Contribution margin is the amount remaining after: variable expenses have been deducted from sales revenue. fixed expenses have been deducted from sales revenue. fixed expenses have been deducted from variable expenses. cost of goods sold has been deducted from sales revenues.

variable expenses have been deducted from sales revenue.