ACG 6315 Exam #1 MATH
Donaldson Trucking uses cargo miles driven (CMD) as an activity base. The company reports the following breakdown of cost behaviors: Fixed Costs per Year License fees = $12,000 Insurance = $28,000 Depreciation = $160,000 Office & Clerical = $190,000 Variable Costs per CMD Driver wages = $0.40/CMD Fuel = $1.25/CMD Semivariable Costs/CMD Maintenance & Service Costs = $10,000 + $0.35/CMD 1. The intercept of the company's total cost graph is $.______ 2. The slope of the company's total cost line is $._____ 3. The company's estimated total cost at 1 million CMD is $______
1. 400,000 2. 2 3. 2,400,000
Wilson sells industrial benders. Wilson's sales price per bender is $500, and its variable cost per bender is $300. The company's fixed costs total $900,000. The amount of sales required to earn a target operating income of $600,000 is $_________
3,3750,000
A company had net income of $350,000 for the year, earnings per share for that year of $2.35, and paid dividends of $1 per share on its 10,000 outstanding shares of common stock. What was the dividend yield, assuming a market price of $12 per share?
A: 8.3% $1/$12 = 8.3%
A company had sales of $90,000 in Year 1, the base year; $95,000 in Year 2; and $78,000 in Year 3. What is the trend percentage for Year 3? Round the answer to two decimal places?
A: 86.7% $78,000/$90,000 = 86.7%
A company has cash of $4,000; accounts receivable of $8,000; inventory of $12,000; and accounts payable of $15,000. What is the amount of the company's working capital?
A: 9,000 $4,000 + $8,000 + $12,000 - $15,000 = $9,000
Fill in the blank question. Hartford Manufacturing uses the high-low method to estimate the fixed and variable cost elements of its total manufacturing overhead. The company uses machine-hours (MH) as its activity base. In the current year, its highest month of activity was 4,500 MH, with a corresponding total manufacturing overhead cost of $800,000. Its lowest month of activity was 2,000 MH, with a corresponding total manufacturing overhead cost of $360,000. The company anticipates that it will use 3,000 MH in January of the upcoming year. Use the high-low method to determine the following: 1. The variable manufacturing overhead cost per MH is $. __________2. The monthly fixed manufacturing overhead cost is ____________$. 3. The estimated total manufacturing overhead cost in January of the upcoming year is $___________
A1) 176 A2) 8,000 A3) 536,000
Wilkinson Corporation uses the high-low method to estimate the fixed and variable cost elements of its total manufacturing overhead. The company uses direct labor hours (DLH) as its activity base. In the current year, its highest month of activity was 3,200 DLH, with a corresponding total manufacturing overhead cost of $300,000. Its lowest month of activity was 1,700 DLH, with a corresponding total manufacturing overhead cost of $180,000. The company anticipates that it will use 2,500 DLH in January of the upcoming year. Use the high-low method to determine the following: 1. The variable manufacturing overhead cost per DLH is ___________$. 2. The monthly fixed manufacturing overhead cost is__________ $. 3. The estimated total manufacturing overhead cost in January of the upcoming year is $.__________
A1) 80 A2) 44,000 A3) 244,000
A company had $200,000 of net income during the year. Its dividend requirements for preferred stock were $25,000. Outstanding numbers for common stock were 200,000 at the beginning of the year, which increased to 250,000 at the end of the year as a result of selling additional stock at the halfway point during the year. What was the amount of the company's earnings per share (on common stock) for the year, rounded to the nearest whole cent?
A: 0.78 ($200,000 - $25,000)/(200,000 + 250,000 shares)/2 = $0.78
A company had gross profit of $500,000; operating income of $200,000; and net income of $100,000 during the year. Its statement of financial position (balance sheet) shows that its stockholders' equity began the year at $1 million and during the year was reduced to $950,000 by the purchase of treasury stock. What was the return on equity for the year, rounded to the nearest whole percentage?
A: 10% $100,000/(($1,000,000 + $950,000)/2) = 10%
A company had a Finished Goods Inventory balance of $200,000 at the beginning of the year. Its cost of goods manufactured for the entire year was $500,000, and its Cost of Goods Sold balance for the year was $600,000. Based on this information, the company's Finished Goods Inventory balance reported in the balance sheet at the end of the year was $
A: 100,000
A company sells 3 products: A, B, and C. Its annual fixed costs average $70,000, and its target operation income is $580,000. Each product's contribution margin ratio (CM%) and relative sales mix are shown below: Product A's CM% = 10% (50% of the sales mix) Product B's CM% = 15% (40% of the sales mix) Product C's CM% = 20% (10% of the sales mix) 1. The company's average contribution margin ratio is ___________%. 2. The amount of sales required to achieve the target operating income is $._______
A: 13, 5,000,000
A company's marketing manager is considering a plan to increase her annual advertising budget by $75,000. By doing so, she estimates that the company's annual revenue would increase by $300,000 over its current level. The company's contribution margin ratio is 30%. If the marketing manager's plan is implemented, the company's operating income is expected to increase by________
A: 15,000
A company has cash of $4,000; accounts receivable of $16,000; accounts payable of $5,000; and bonds payable of $12,000. What is the amount of the company's working capital?
A: 15,000 $4,000 + $16,000 - $5,000 = $15,000
Wilson sells industrial benders. Wilson's sales price per bender is $500, and its variable cost per bender is $300. The company's fixed costs currently total $900,000. Wilson expects to generate revenue of $4 million in the upcoming period. The company must reduce its current level of fixed costs (FC) by ________$ in order to achieve a target operating income of $850,000.
A: 150,000
If a company had sales of $500,000; gross profit of $360,000; interest expense of $10,000; and net income of $125,000, the component percentage for interest expense, is ____________ .
A: 2% interest expense / Net sales
Wilson sells industrial benders. Wilson's sales price per bender is $500, and its variable cost per bender is $300. The company's fixed costs total $900,000. The company's break-even point in sales dollars is $
A: 2,250,000
A company's assets include cash of $6,000; accounts receivable of $10,000; inventories of $56,000; and plant assets of $28,000, totaling $100,000. Its liabilities include accounts payable of $25,000 and bonds payable of $45,000, totaling $70,000. Its stockholders' equity includes $10,000 of capital stock and $20,000 of retained earnings, totaling $30,000. What is the company's current ratio?
A: 2.88 ($6,000 + $10,000 + $56,000)/$25,000 = 2.88
A company has net income of $500,000, interest expense of $35,000 and income taxes of $150,000. What is the interest coverage ratio, rounded to the nearest whole number?
A: 20 ($500,000 + $35,000 + $150,000)/$35,000 = 19.57 times
A company has total assets of $1.5 million; sales of $4 million; and plant and equipment, net of depreciation, of $300,000. What is the component percentage for plant and equipment?
A: 20% $300,000/$1,500,000 = 20%
A company's marketing manager is considering a plan to increase his annual advertising budget by $180,000. By doing so, he estimates that the company's annual revenue would increase by $400,000 over its current level. The company's contribution margin ratio is 40%. If the marketing manager's plan is implemented, the company's operating income is expected to decrease by $_____
A: 20,000
Medford sells muffler bearings. Medford's sales price per unit is $150, and its variable cost per unit is $50. The company's fixed costs currently total $800,000. The company anticipates that it will sell 25,000 units in the upcoming period. The company must reduce the current level of fixed costs (FC) by $_________ to achieve a target operating income of $1.9 million.
A: 200,000
Medford sells muffler bearings. Medford's sales price per unit is $150, and its variable cost per unit is $50. The company's fixed costs total $800,000. The company must sell _________ units to achieve a target operating income of $1.5 million.
A: 23,000
A company's Work in Process Inventory had a balance of $10,000 at the beginning of the year and $15,000 at the end of the year. During the year, it used $50,000 of direct materials, and it incurred direct labor and manufacturing overhead costs of $100,000 and $120,000, respectively. Based on this information, the company's cost of finished goods manufactured was $
A: 265,000
One of Ajax Company's products has a unit contribution margin of $25. Currently, the company produces and sells an average of 103,600 units of this product annually, from which it consistently generates an operating income of $2.5 million. Competition is increasing, and the company's brand manager anticipates that annual sales will level-off at 100,000 units in the years ahead. Her goal is to increase the product's annual operating income by 16.4%, to $2.91 million per year. Her strategy for achieving this goal is to change suppliers, which will reduce direct material costs by $2 per unit. She also intends to increase the product's selling price slightly to make it more comparable to the pricing of its competitors. Based on this information, if the product's annual fixed costs remain unchanged at $90,000, the brand manager estimates that the current selling price should be increased by $___________
A: 3
A company has a contribution margin ratio of 30%. Up to the break-even point, each dollar of sales will contribute ________ cents to the coverage of _______ costs.
A: 30, fixed costs
Demand for a company's product is expected to increase significantly in the upcoming year, resulting in additional direct labor overtime costs of $2 per unit. The production manager expects that the higher volume will increase annual maintenance costs on the company's manufacturing equipment by $20,000. Fixed costs currently average $500,000 per year, and the company's contribution margin per unit is currently $27. Based on this information, the production manager estimates that the company must produce and sell _____________units to achieve a target operating income of $250,000 in the upcoming year.
A: 30,800
A company's sales for the year were $650,000. Its accounts receivable was $50,000 at the beginning of the year and $60,000 at the end of the year. What were the average number of days to collect accounts receivable, rounded to the nearest whole day?
A: 31 days $650,000/(($50,000 + $60,000)/2) = 11.8; 365 days/11.8 = 31 days
A company had sales of $10,000 in Year 1 and $13,500 in Year 2. What was the percentage increase?
A: 35% ($13,500 - $10,000)/$10,000 = 35%
A company sells 3 products: A, B, and C. Its annual fixed costs average $400,000, and its target operating income is $1 million. Each product's contribution margin ratio (CM%) and relative sales mix are shown below: Product A's CM% = 30% (60% of the sales mix) Product B's CM% = 40% (30% of the sales mix) Product C's CM% = 50% (10% of the sales mix) 1. The company's average contribution margin ratio is ____________%. 2. The amount of sales required to achieve the target operating income is $._________
A: 35, 4,000,000
Fill in the blank question. A company sells 3 products: A, B, and C. Its annual fixed costs average $560,000, and its target operating income is $200,000. Each product's contribution margin ratio (CM%) and relative sales mix are shown below: Product A's CM% = 20% (15% of the sales mix) Product B's CM% = 50% (10% of the sales mix) Product C's CM% = 40% (75% of the sales mix) 1. The company's average contribution margin ratio is _______%. 2. The amount of sales required to achieve the target operating income is $_________.
A: 38, 2,000,000
change in production methods is expected to reduce direct labor costs by $10 per unit. However, the production manager expects that annual fixed manufacturing overhead will increase by $400,000. Fixed costs currently average $800,000 per year, and the company's contribution margin per unit is currently $40. Based on this information, the production manager estimates the the company must produce and sell _________ units to earn a target operating income of $750,000 in the upcoming year.
A: 39,000
A company had operating income (income before income taxes and interest) of $200,000 and net income of $185,000. Annual interest expense was $50,000. The interest coverage ratio was ___________ times.
A: 4 operating income /annual interest expense
A company has a contribution margin ratio of 40%. After the break-even point, each dollar of sales will contribute ______cents to the company's ________income.
A: 40, Operating Income
A company had a Finished Goods Inventory balance of $150,000 at the beginning of the year. Its cost of goods manufactured for the entire year was $400,000, and its ending Finished Goods Inventory balance was $80,000. Based on this information, the company's Cost of Goods Sold balance reported in the income statement was $
A: 470,000
A company had interest expense of $12,400 during a year. In the previous year, interest expense was $11,800. What was the percentage increase rounded to the nearest 1/10 percent?
A: 5.1% ($12,400 - $11,800)/$11,800 = 5.1%
A company's Work in Process Inventory had a balance of $20,000 at the beginning of the year and $5,000 at the end of the year. During the year, it used $30,000 of direct materials, and it incurred direct labor and manufacturing overhead costs of $200,000 and $300,000, respectively. Based on this information, the company's cost of finished goods manufactured was $
A: 545,000
Henderson Corporation uses the high-low method to estimate the fixed and variable cost elements of its total manufacturing overhead. The company uses direct labor hours (DLH) as its activity base. In the current year, its highest month of activity was 2,500 DLH, with a corresponding total manufacturing overhead cost of $200,000. Its lowest month of activity was 1,300 DLH, with a corresponding total manufacturing overhead cost of $116,000. Use the high-low method to determine the following: 1. The variable manufacturing overhead cost per DLH is $.________________ 2. The monthly manufacturing overhead cost is $_______________
A: 70, 25,000
A company has cash of $20,000; accounts receivable of $45,000; inventory of $60,000; plant assets (net of depreciation) of $100,000; and accounts payable of $55,000. The amount of the company's working capital is $ _________
A: 70,000 Working Capital = current assets - current liabilities (45,000+60,000+20,000) - (55,000) =70,000
A company's current market price is $12 per share. Other items of key information from its financial statements include gross profit of $100,000; net income of $40,000; and earnings per share of $1.50. What is the company's price-earning ratio?
A: 8 $12/$1.50 = 8
Medford sells muffler bearings. Medford's sales price per unit is $150, and its variable cost per unit is $50. The company's fixed costs total $800,000. The company's break-even point is _________ units.
A: 8,000