ACCOUNTING 202 - Exam 2
If a segment is eliminated, ___________fixed costs that are not traced to the segment will not change.
common
Gifts Galore had sales revenue of $189,000. Total contribution margin was $100,170 and total fixed expenses were $27,500. The contribution margin ratio was ___________
100170 / 189000 = 53%
Company A has a contribution margin ratio of 35%. For each dollar in sales, contribution margin will increase by ____________
$0.35
Given sales of $100,000 a contribution margin of $40,000, and fixed expenses of $50,000, the result is a _______-_.
$10,000 net operating loss - $40,000 - $50,000
A company sold 20,000 units of its product for $20 each. Variable cost per unit is $11. Fixed expenses total $150,000. The company's contribution margin is ______.
$180,000 - (20,000 X $20) - (20,000 X $11)
A company sold 750 units with a contribution margin of $120 per unit. If the company has a break-even point of 450 units, the net operating income or (loss) is _________.
$36,000
Citrus Scents produces body sprays. Each bottle has a unit product cost of $5.38. This month 1,490 bottles were produced and 1,203 bottles were sold. Total cost of goods sold is
$6,472.14
JPL Company has two segments - Retail and Commercial. The Retail segment has a contribution margin ratio of 40% and traceable fixed expenses of $70,000. Commercial has traceable fixed expenses of $50,000 and a contribution margin ratio of 55%. The company also has $30,000 of common fixed expenses. The break-even point in dollar sales for the Retail segment equals __________
$70,000 / 0.40 = $175,000
Blink sells and manufactures frames for eyeglasses. The unit product cost for frame #47320 is $76.35. Last period, Blink produced 200 frames and sold 155 of them. Total cost of goods sold equals __________
$76.35 x 155 (units sold)
Company A has fixed costs of $564,000 and a contribution margin of 62%. Sales dollars to break-even rounded to the nearest whole dollar equals _________
$909677
Which of the following is needed to calculate raw materials to be purchased on the direct materials budget? (multiple answers) Beginning inventory of raw materials Ending finished goods inventory Budgeted unit sales Raw materials required per unit
- beginning inventory of raw materials - raw materials required per unit
Which of the following budgets are needed to calculate unit product costs? Manufacturing overhead Direct labor Direct materials Cash Selling and administrative
- manufacturing overhead - direct labor - direct materials
At the break-even point ______. the company is experiencing a loss total revenue equals total cost net operating income is zero the company is earning a profit
- total revenue income is zero
Given budgeted sales of 10,000 units, desired ending inventory of 5,000 units, and beginning inventory of 2,000 units, required production is __________ units. 15,000 7,000 10,000 13,000
10,000 + 5,000 = 15,000 15,000 - 2,000 = 13,000
If a company has a variable expense ratio of 35%, its CM ratio must be ________%
100% - 35% = 65%
If sales increase by 15% and the degree of operating leverage is 6, net operating income should increase by ___________%
15% x 6 = 90%
Spice sells paprika for $9.00 per bottle. Variable cost is $2.43 per bottle and Spice's annual fixed costs are $825,000. The variable expense ratio for paprika is _________
2.43/9.00 = 27%`
If sales increase by 5% and the degree of operating leverage is 4, net operating income should increase by ________
20%
Run Like the Wind sells ceiling fans. Target profit for the year is $470,000. If each fan's contribution margin is $32 and fixed costs total $222,640, the number of fans required to meet the company's goal is:
21645
Which of the following is needed to prepare a sales budget? 1. Desired ending inventory of raw materials 2. Desired ending inventory 3. The budgeted number of units to be sold 4. Beginning inventory of finished goods
3. the budgeted number of units to be sold
Steel, Inc. has a margin of safety in dollars of $559,740. If actual sales were $2,946,000, Steel's margin of safety percentage is ___________%
559740 / 2946000 = 19%
The percentage of the variation in cost that is explained by activity is ______
R²
Costs are categorized by function when using ___________ costing and by behavior when using ____________costing
absorption, variable
A company is currently selling 10,000 units of product monthly for $40 per unit. The unit contribution margin is $27. The company believes that spending $50,000 per month on advertising will allow them to increase the selling price to $45 and that sales will increase by 750 units per month. The company should ______ the idea because profit will ______.
accept; increase $24000
Under absorption costing product costs consist of ______ costs.
both variable and fixed manufacturing
Multiplying unit selling price times the number of units required to break-even is one way to calculate __________
break-even sales dollars
Margin of safety in dollars is:
budgeted (or actual) sales minus break-even sales
When a company sells one unit above the number required to break-even, the company's net operating income will ______.
change from zero to a net operating profit
The calculation of contribution margin (CM) ratio is ___________-
contribution margin / sales
Assuming sales price remains constant, an increase in the variable cost per unit will ______ the contribution margin per unit. Multiple choice question.
decrease
An example of a traceable fixed cost for General Motors' Corvette Division is the ___________ -salary of the General Motors Chief Executive Officer -utilities cost of the General Motors corporate headquarters -direct materials used in the production of the Corvettes -depreciation on equipment used to manufacture Corvettes
depreciation on equipment used to manufacture Corvettes
The cost of unsold units is computed on the __________ budget.
ending finished goods inventory
Once the break-even point is reached, the sale of an additional unit increases contribution margin by an amount that is ______ the increase in net operating income.
equal to
A company has reached its break-even point when the contribution margin ________ , fixed expenses.
equals
In a least-squares regression line, the vertical intercept (a) of the line represents the total _________ cost
fixed
When units sold exceed units produced, net income under variable costing will generally be _______ net income under absorption costing.
higher than
The contribution margin statement is ordinarily used by those ______.
inside the company only
In a least-squares regression equation, a represents the ________ and b represents the _________
intercept, slope
All costs of production other than direct materials and direct labor are shown on the __________ ___________budget.
manufacturing overhead
The calculation of unit product cost requires information from the __________ budget
manufacturing overhead
Fill in the blank question. When allocating fixed manufacturing overhead cost to units under absorption costing, the total fixed overhead costs must be divided by the number of units ________
produced
The first line of the direct labor budget consists of the budgeted units expected to be ____________ during the period.
produced
When using absorption costing, fixed manufacturing overhead cost per unit = Total fixed manufacturing overhead cost divided by units:
produced
Absorption costing treats fixed manufacturing overhead as a __________cost.
product
In a manufacturing company, the _______ budget is prepared right after the sales budget.
production
Both the production and selling and administrative expense budgets are prepared using information directly from the ________ budget.
sales
The first step in the budgeting process is preparing the Blank______ budget.
sales
The first step in the budgeting process is the preparation of the ________ budget
sales
The variable expense ratio is the ratio of variable expense to _________
sales
To convert the margin of safety in dollars to the margin of safety in terms of the number of units sold, divide the margin of safety in dollars by the:
sales price per unit
The ending finished goods inventory budget computes the cost of ____________ units.
unsold
Direct costing or marginal costing are other terms for ___________ costing.
variable
The slope of the regression line represents the __________ cost per unit of activity.
variable
Goldin Corporation currently pays its salesperson a flat salary of $5,000 per month and is considering paying $20 per unit instead. Sales are currently 200 units per month. Goldin believes the compensation change will increase unit sales by 25%. The current contribution margin is $80 per unit. If the change is implemented, net operating income will ________
increase by $1000
Bluin Corporation pays its salesperson a flat salary of $5,750 per month and is considering paying $30 per unit instead. Current unit sales are 250 per month, but Bluin believes the compensation change will increase unit sales by 50%. Bluin's current contribution margin is $100 per unit. If Bluin switches the compensation and sales grow as expected, net operating income will _________ per month.
increase by $7000
The statistic R² ________
is a measure of goodness of fit
A traceable fixed cost ________ -varies with the activity level in a particular segment -is incurred because of the existence of the segment -supports the operations of more than one segment -will continue if the segment is discontinued
is incurred because of the existence of the segment
The margin of safety percentage is:
margin of safety in dollars ÷ total budgeted (or actual) sales in dollars
An integrated business plan that formally lays out the company's goals is called the Blank______ budget.
master
When inventory decreases, cost of goods sold under absorption costing will generally be __________ cost of goods sold under variable costing.
more than
If the total contribution margin is less than the total fixed expenses, a __________ occurs.
net loss
Terry's Trees has reached its break-even point and has a contribution margin ratio of 70%. For each $1 increase in sales net operating income will increase by $0.70 total contribution margin will increase by $0.30 net operating income will increase by $0.30 total contribution margin will increase by $0.70
net operating income will increase by $0.70 total contribution margin will increase by $0.70
If a segment is entirely eliminated, common fixed costs will _______
not change
Segment break-even calculations include _______ fixed expenses.
only traceable
Under both variable costing and absorption costing, variable and fixed selling and administrative costs are treated as ______ costs.
period
Under both variable costing and absorption costing, variable and fixed selling and administrative costs are treated as __________costs.
period
Variable costing treats fixed manufacturing overhead as a(n) ____________ cost
period
In a manufacturing company, the ________ budget shows the number of units that must be manufactured to satisfy sales needs and provide for the desired ending inventory.
production
The direct labor budget is based directly on the _______ budget.
production
A company can repay outstanding principal and interest when ______.
the cash excess is greater than the minimum required cash balance
CM ratio is equal to 1 - ___________ __________ ratio.
variable expense
Costs are separated between variable and fixed expenses when using ______ costing, whereas ______ costing separates costs between product and period.
variable, absorption
Variable costing income statements separate _______ expenses from expenses ___________
variable, fixed
The break-even point is the level of sales at which the profit equals ________ .
zero
Absorption costing net income is calculated by subtracting selling and administrative expenses from ___________ _________
gross margin
Budgeted sales are $982,000, break-even sales are $932,200, and fixed expenses are $429,000. The company's budgeted margin of safety in dollars is:
982,000 - 932,200
Given a sales price of $100, variable costs of $70 and a break-even point of 500 units, net operating profit for sale of 501 units will be $___________ .
$30 - 501 X $70 - 500 X $70 = 70 - 100
A company has total sales of $1,430,000. Fixed expenses are $657,000 and the contribution margin ratio is 67%. Company profit (loss) is ________
$301,100
Daisy's Dolls sold 30,000 dolls this year. Each doll sold for $40 and had a variable cost of $19. Fixed expenses were $250,000. Net operating income for the year is ________.
$380,000 - (30,000 X $40) - (30,000 X $19) - that answer - $250,000
A company reported $100,000 in sales and $80,000 in variable costs at the breakeven point of 200 units. If the company sells 201 units, net profit will be ________.
$100
Comfy Cozy Chairs makes rockers that require $45 of direct materials and $37 of direct labor. Variable manufacturing overhead is $8 per rocker, and fixed manufacturing overhead totals $58,000. Variable selling and administrative costs are $15 per rocker, and fixed selling and administrative costs total $102,000. During the period, 2,000 rockers were produced and 1,640 were sold. The unit product cost using absorption costing is __________
$45 + $37 + $8 + ($58,000/ 2,000) = $119
A company sells 500 sleds per month for $80. Variable costs are $41 per unit and fixed expenses are $3,500 per month. The company thinks that using a new material would increase sales by 70 units per month. If the new material increases variable costs by $4 per unit, the impact on contribution margin would be a __________
$450 increase
Put'er There manufactures baseball gloves that require $22 of direct materials and $18 of direct labor. Variable manufacturing overhead cost is $7 per glove and fixed manufacturing overhead cost is $19,000 in total. Variable selling and administrative costs are $11 per unit sold and fixed selling and administrative costs are $13,200. Last period, 800 gloves were produced, and 585 gloves were sold. The unit product cost using variable costing is
$47.00
Citrus Scents produces body sprays. Variable selling and administrative expense is $1.05 per bottle and fixed selling and administrative expense is $4,500 per month. If 1,490 bottles are produced and 1,203 are sold in July, total selling and administrative expense for the month will be
$5,763.15
Adams, Inc. has sales of $100,000 with a contribution margin of $60,000 and net income of $20,000. Baron, Inc. has sales of $110,000 with a contribution margin of $44,000 and net income of $22,000. Which of the following statements are correct? If sales fall, Baron will experience a greater decrease in income than Adams. Baron's net income grows twice as fast as its sales. Adams has a higher degree of operating leverage than Baron.
-Baron's net income grows twice as fast as its sales. -Adams has a higher degree of operating leverage than Baron.
A segment should probably be dropped when the segment _______ -has important side effects on other segments -cannot cover its own costs -has a positive segment margin but cannot cover any common fixed costs -has a contribution margin that cannot cover traceable fixed costs
-cannot cover its own costs -has a contribution margin that cannot cover traceable fixed costs
The high-low method ______. is difficult to apply and requires a statistical software package is based on periods where the activity tends to be unusual uses only two data points generally provides an accurate estimate of true cost behavior during normal periods
-is based on periods where the activity tends to be unusual -uses only two data points
Granny's Touch manufactures and sells cookbooks. The company's variable cost of goods sold is $39,200 and variable selling and administrative expense is $6,200. Fixed manufacturing overhead is $19,700 and fixed selling and administrative expense is $9,290. An income statement prepared using variable costing shows $ _________as the total fixed expenses.
28990
Given sales of $1,452,000, variable expenses of $958,320 and fixed expenses of $354,000, the contribution margin ratio is __________
34%
A company has two segments with total sales of $500,000 and total variable costs of $343,750. Traceable fixed expenses are $50,000 and common fixed expenses are $80,000. The break even in dollars for the company as a whole equals $ _________
416,000
Paula's Perfumes has a target profit of $4,000 per month. Perfume sells for $15.00 per bottle and variable costs are $13.50 per bottle. Fixed costs are $3,200 per month. The number of bottles that must be sold each month to earn the target profit is:
4800
A company has a target profit of $204,000. The company's fixed costs are $305,000. The contribution margin per unit is $40. The BREAK-EVEN point in unit sales is _________
7625
Selling and administrative expenses ______. may be treated as either product or period costs are treated as period costs under variable costing only are always treated as period costs are treated as period costs under absorption costing only
are always treated as period costs
Selling and administrative expenses _________
are always treated as period costs
To prepare a budgeted balance sheet as of December 31, 20x4, data is needed from the ______ December 31, 20x3.
balance sheet as of
Contribution margin: is not affected by changes in activity. equals sales minus fixed expenses. is first used to cover variable expenses. becomes profit after fixed expenses are covered.
becomes profit after fixed expenses are covered
A budgeted balance sheet is developed using data from the ________ of the budget period and data contained in the various schedules.
beginning
When using the high-low method, if the high or low levels of cost do not match the high or low levels of activity, __________ -choose the periods with the highest and lowest levels of cost and their associated activities -choose the periods with the highest and lowest levels of activity and their associated costs -skip that period and move to the next highest or lowest level where costs and activity match
choose the periods with the highest and lowest levels of activity and their associated costs
After reaching the break-even point, a company's net operating income will increase by the ______________ _______________per unit for each additional unit sold.
contribution margin
Product costs under absorption costing include ________ direct labor variable selling and administrative fixed selling and administrative fixed manufacturing overhead direct materials variable manufacturing overhead
direct labor fixed manufacturing overhead direct materials variable manufacturing overhead
Under variable costing the cost of a unit of inventory does not contain ___________
fixed manufacturing overhead
The unit product cost of a blender is $24. If 900 blenders are produced and 849 blenders are sold, the total cost of goods sold is $_____
$24 x 849 (sold) = 20,376
Sperling Company's master budget shows expected sales of 10,000 units and expected production of 11,000 units for the month of March. Each unit requires 1/2 hour of direct labor. The direct labor rate is $15.00 per hour. Calculate the expected total direct labor cost for the month of March. $165,000 $82,500 $150,000 $75,000
$82,500
Vivian's Violins has sales of $326,000, contribution margin of $184,000 and fixed costs total $85,000. Vivian's Violins net operating income is _________.
$99,000
Vivian's Violins has sales of $326,000, contribution margin of $184,000 and fixed costs total $85,000. Vivian's Violins net operating income is ____________.
$99,000 - contribution margin - total fixed costs
Dollar break-even for a company is calculated as _________
(Traceable fixed expenses + Common fixed expenses) ÷ Overall CM ratio
A product has a selling price of $10 per unit, variable expenses of $6 per unit and total fixed costs of $35,000. If 10,000 units are sold, net operating income will be $__________
- $5,000 (10,000 X $10) - (10,000 X $6) = $40,000 - $35,000 = $5000
Company A has sales of $500,000, variable costs of $350,000, and fixed costs of $150,000. Company A has ______. incurred a net operating loss a contribution margin equal to fixed costs reached the break-even point earned a net operating profit
- a contribution margin equal to fixed costs - reached the break - even point
A variable costing income statement _______ - is constructed exactly like an absorption costing income statement - focuses on fixed and variable expenses, while an absorption costing income statement focuses on period and product costs - does not include fixed manufacturing overhead, which is included on an absorption costing income statement - calculates contribution margin while the absorption costing income statement calculates gross margin
- focuses on fixed and variable expenses, while an absorption costing income statement focuses on period and product costs - calculates contribution margin while the absorption costing income statement calculates gross margin
Davidson Corporation's master budget shows expected direct labor cost of $90,000 for the month of May. During May, the company's expected sales equal 12,000 units and expected production is 15,000 units. If each unit requires 1/2 hour of direct labor, the budgeted direct labor rate is $__________ per hour.
12
Variable expenses ÷ Sales is the calculation for the ____________ _______________ratio.
variable expense
Citrus Fruits sells oranges for $20 per crate. If the company's margin of safety is $180,000, the margin of safety in units is __________ crates.
180,000/20 = 9000
A company incurred $12,000 of maintenance cost for 6,500 machine hours in June and $14,250 of maintenance costs for 8,000 hours in August. Assuming these are the high and low months of activity, the estimated fixed maintenance costs using the high-low method is $_________
2250
Shonda's Shoes sell for $95 per pair. If Shonda must sell 284 pairs of shoes to break-even, sales dollars needed to break-even equals $________
26,980
Jump-It Corporation has a margin of safety of $272,000. The company sold 100,000 units this year. If the company sells each unit for $17, the margin of safety percentage is:
272000 / 100000 x 17 = 16%
Polly's Day Planners sells its planners for $35 each. Sales this year equals $927,500. The margin of safety is $27,300. The margin of safety in units is _________
780
Company A has fixed costs of $564,000 and has set a target profit of $800,000. If Company A has a contribution margin ratio of 62%, sales dollars needed to reach the target profit equals:
800000 + 564000 / .62 = $2,200,000
Seating Galore sells high-end desk chairs. The variable expense per chair is $85.05 and the chairs sell for $189.00 each. The variable expense ratio for Seating Galore's chairs is ________
85.05 / 189 = 45%
Blissful Breeze manufactures and sells ceiling fans. Each fan has a unit product cost of $112 and a unit selling price of $190. If Blissful Breeze produces 900 fans and sells 842 fans this month, the total cost of goods sold will be $
94,304
An absorption costing income statement calculates __________. -net income by deducting selling and administrative costs from contribution margin -contribution margin by deducting variable costs from sales -gross margin by deducting cost of goods sold from sales -net income by deducting fixed costs from contribution margin
gross margin by deducting cost of goods sold from sales
What is subtracted from total budgeted selling and administrative expenses to determine the cash disbursements for selling and administrative expenses?
non cash expenses
Given the following information, calculate the unit product cost under absorption costing. Direct materials: $50/unit Direct labor: $75/unit Variable manufacturing overhead: $27/unit Fixed manufacturing overhead: $30,000 total Units: 10,000 produced and 6,000 sold
50+75+27+(30,000/10,000) = $155
Chitter-Chatter sells phones and has set a target profit of $975,000. The contribution margin ratio is 65%, and fixed costs are $195,000. Sales dollars needed to earn the target profit total:
975000 + 195000 / .65 = 1,800,000
Adams, Inc. has sales of $100,000 with a contribution margin of $60,000 and net income of $20,000. Baron, Inc. has sales of $110,000 with a contribution margin of $44,000 and net income of $22,000. Thus, the degree of operating leverage is _________ for Adams, Inc. and _______ for baron, inc
60000/20000 = 3 44000/22000 = 2
Frames, Inc. picture frames each require $19 of direct materials and $40 of direct labor. Variable manufacturing overhead cost is $9 per frame and variable selling and administrative expense is $13 per frame sold. Total fixed manufacturing overhead cost per month is $15,000 and the company produces 5,000 frames each month. The unit product cost of each frame using variable costing is $
68
Edison Corporation's variable manufacturing overhead rate is $5.00 per direct labor-hour. Total budgeted fixed overhead is $25,000 per month. The $25,000 per month includes $7,000 in depreciation expense. Total budgeted direct labor-hours for the month of July is 20,000. Based on the month of July only, the predetermined overhead rate is $_______
6.25
S&P Enterprises has scheduled direct material purchases of $120,000 in April, $140,000 in May and $160,000 in June. The company pays for 75% of its purchases in the month of purchase and 25% the month after the purchase. Calculate the expected cash disbursements for the month of May. $125,000 $135,000 $145,000 $105,000
$135,000
When a segment cannot cover its own costs, that segment should ___________ -probably be dropped -be combined with another profitable segment -recalculate its segment margin without including common fixed costs
probably be dropped
Budgeted expenses for areas other than manufacturing are shown on the __________ budget.
selling and administrative
The break-even point is reached when the contribution margin is equal to:
total fixed expenses
Edison Corporation's variable manufacturing overhead rate is $5.00 per direct labor-hour. Total budgeted fixed overhead is $25,000 per month. The $25,000 per month includes $7,000 in depreciation expense. Total budgeted direct labor-hours for the month of July is 20,000. Budgeted cash disbursements for manufacturing overhead for July equals ___________. $132,000 $100,000 $125,000 $118,000
$118,000
S&P Enterprises has scheduled direct material purchases of $100,000 in January, $130,000 in February and $150,000 in March. The company pays for 75% of its purchases in the month of purchase and 25% the month after the purchase. Calculate the expected cash disbursements for the month of February. $122,500 $130,000 $107,500 $135,000
$122,500
ABC, Inc.'s expected sales for the first six month of the year are as follows. Month Expected Sales January $120,000 February $150,000 March $160,000 April $200,000 May $220,000 June $250,000 Experience has shown that 60% of sales are collected in the month of sale and 40% are collected the month after sale. Calculate expected cash collections for the month of March. $154,000 $160,000 $156,000 $176,000
$156,000 (use the chart she showed in class)
ABC, Inc.'s expected sales for the first six month of the year are as follows. Month Expected Sales January $120,000 February $150,000 March $160,000 April $200,000 May $220,000 June $250,000 Experience has shown that 60% of sales are collected in the month of sale and 40% are collected the month after sale. Calculate expected cash collections for the month of April. $184,000 $176,000 $208,000 $200,000
$184,000
A company's break-even point is 17,000 units. If the contribution margin is $22 per unit and 26,000 units are sold, net operating profit will be ______.
$198,000 - (26,000 X $22) - (17,000 X $22)
Cakes by Jacki has $144,000 of fixed costs per year. The contribution margin ratio is 59%. The sales dollars to break-even rounded to the nearest dollar equals ______
$244068
Pretty in Pearls sold 95 necklaces last month. If variable cost per unit is $40 and fixed costs total $3,085, the company's total variable cost was ______.
$3,800
Which of the following budgets are directly based on information from the sales budget? (multiple answers) Production Manufacturing overhead Selling & administrative expense Direct materials
- production budget - selling & administrative expense
Which of the following items are found above the contribution margin on a contribution margin format income statement? Variable expenses Sales Net operating income Fixed expenses
- variable expenses - sales
Required borrowings on a cash budget is calculated by __________.
adding the desired ending cash balance to the amt of the cash deficiency
In a manufacturing company, the ______ budget details the raw materials that must be purchased to fulfill the production budget and provide for adequate inventories
direct materials
In a manufacturing company, the ___________ __________ budget details the raw materials that must be purchased to fulfill the production budget and to provide for adequate inventories.
direct materials
Total contribution margin equals ______. variable expenses plus net operating income total sales minus net operating income fixed expenses plus net operating income total sales minus fixed expenses
fixed expenses plus net operating income
What is added to the variable selling and administrative expenses to get the total selling and administrative expenses?
fixed selling and administrative expenses
Contribution margin is first used to cover _____________ expenses. Once the break-even point has been reached, contribution margin becomes __________ .
fixed, profit
In a manufacturing company, the budgets for manufacturing costs, including the direct materials budget, the direct labor budget, and the manufacturing overhead budget are all based on the ____________ budget.
production
The direct materials budget directly relies on the _________ budget.
production
In a manufacturing company, the budgets for manufacturing costs, including the direct materials budget, the direct labor budget, and the manufacturing overhead budget are all based on the _________ budget.
production budget
In a manufacturing company, which budget is used as the basis for creating the direct materials budget, the direct labor budget, and the manufacturing overhead budget?
production budget
Sales total $500,000, and fixed costs total $300,000. The contribution margin ratio is 68%. Profit = $_________
profit = .68 x 500000 - 300000 = 40,000
The contribution margin as a percentage of sales is referred to as the contribution margin or CM _________
ratio
To calculate total sales on the sales budget, multiply budgeted sales in units by ______.
sales price per unit
In large organizations, many smaller individual budgets submitted by department heads and other responsible people comprise the __________ budget.
selling and administrative
Variable selling and administrative expenses are calculated by multiplying the budgeted units ________ by the variable selling and administrative expense per unit.
sold
When a company only produces a single product, the total variable cost can be calculated with the equation ______. variable cost per unit multiplied by quantity of units sold contribution margin minus total fixed costs total sales minus total period costs total sales minus net income
variable cost per unit multiplied by quantity of units sold
The contribution margin is equal to sales minus ______.
variable expenses
Borrowing money is required whenever ______. the cash excess is greater than the minimum required cash balance the cash excess equals the minimum required cash balance there is a cash deficiency the cash excess is less than the minimum required cash balance
- there is cash deficiency - the cash excess is less than the minimum required cash balance
The contribution margin statement is primarily used for ______. tax purposes external financial statement reporting both internal and external reporting internal decision making
internal decision making
A number of separate but interdependent, budgets that formally lay out the company's sales, production, and financial goals are contained in the __________ budget.
master budget
Working hours required to satisfy the production budget are shown on the ________ __________ budget.
direct labor
