exam 2 accounting

A soft drink bottler incurred the following factory utility cost: $3,811 for 1,050 cases bottled and $3,878 for 1,400 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to: Multiple Choice $3.63 $2.72 $2.77 $0.19

$0.19

this year last year Units Sold 250,000 200,000 Sales $ 1,250,000 $ 1,000,000 Cost of goods sold 875,000 700,000 Gross margin 375,000 300,000 Selling and administrative expenses 222,000 210,000 Net operating income $ 153,000 $ 90,000 Using the high-low method of analysis, what are the company's estimated variable selling and administrative expenses per unit? $0.88 $4.17 $0.96 $0.24

$0.24

Cubie Corporation has provided the following data concerning its only product: Selling price $ 97 per unit Current sales 10,300 units Break-even sales 8,961 units What is the margin of safety in dollars?

$129,883Correct

Miscavage Corporation has two divisions: the Beta Division and the Alpha Division. The Beta Division has sales of $300,000, variable expenses of $152,100, and traceable fixed expenses of $70,300. The Alpha Division has sales of $610,000, variable expenses of $335,800, and traceable fixed expenses of $131,900. The total amount of common fixed expenses not traceable to the individual divisions is $133,200. What is the company's net operating income?

$86,700 q20

A soft drink bottler incurred the following factory utility cost: $3,836 for 1,000 cases bottled and $3,900 for 1,300 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to:

0.21

Majid Corporation sells a product for $190 per unit. The product's current sales are 42,200 units and its break-even sales are 34,920 units. What is the margin of safety in dollars?

1,383,200

how do you find high/ low?

1. determine high and lows (activity level & cost)... activity level is X and cost is Y 2. subtract the low from high to find the chnage in Y and X 3. b=change in Y/change in X 4. plug in a=y-bx

How do you find the target profit analaysis per unit?

1. equation method: profit=unit cm x Q - F.E 2. formula method: taget profit+F.E/cm per unit

Serfass Corporation's contribution format income statement for July appears below: Sales $ 364,000 Variable expenses 163,800 Contribution margin 200,200 Fixed expenses 92,090 Net operating income $ 108,110 The degree of operating leverage is closest to: 1.82 0.54 1.85 0.30

1.85

Mcmurtry Corporation sells a product for $210 per unit. The product's current sales are 13,200 units and its break-even sales are 10,956 units. The margin of safety as a percentage of sales is closest to:

17%

January February March Sales in units 16,000 22,000 19,000 Production in units 19,000 20,000 18,500 One pound of material is required for each finished unit. The inventory of materials at the end of each month should equal 25% of the following month's production needs. Purchases of raw materials for February would be budgeted to be:

19,625 pounds q18

Mcmurtry Corporation sells a product for $270 per unit. The product's current sales are 13,800 units and its break-even sales are 10,488 units. The margin of safety as a percentage of sales is closest to:

24% Explanation Margin of safety in dollars = Total sales − Break-even sales = ($270 per unit × 13,800 units) − ($270 per unit × 10,488 units) = $3,726,000 − $2,831,760 = $894,240

Selling price per unit$ 240.00 Variable expense per unit$ 99.50 Fixed expense per month$ 454,290 The unit sales to attain the company's monthly target profit of $35,000 is closest to: 2,039 3,233 3,482 4,917

3,482

Alpha Corporation reported the following data for its most recent year: sales, $640,000; variable expenses, $448,000; and fixed expenses, $128,000. The company's degree of operating leverage is closest to: Multiple Choice 3.30 3.00 4.00 10.00

3.0

The July contribution format income statement of Doxtater Corporation appears below: Sales$ 564,400 Variable expenses312,800 Contribution margin251,600 Fixed expenses193,800 Net operating income$ 57,800 The degree of operating leverage is closest to: 0.23 0.10 4.35 9.76

4.35

With an operating leverage of 5, if RBC increases its sales by 10%, net operating income would increase by...

50% because 10% x 5= 50%

Hettrick International Corporation's only product sells for $120.00 per unit and its variable expense is $52.80. The company's monthly fixed expense is $396,480 per month. The unit sales to attain the company's monthly target profit of $13,000 is closest to: 7,755 5,753 3,412 6,093

6,093 Explanation Unit contribution margin = Selling price per unit − Variable expenses per unit = $120.00 per unit − $52.80 per unit = $67.20 per unit Unit sales to attain a target profit = (Target profit + Fixed expenses) ÷ Unit contribution margin = ($13,000 + $396,480) ÷ $67.20 per unit = $409,480 ÷ $67.20 per unit = 6,093 units

Bristo Corporation has sales of 1,900 units at $50 per unit. Variable expenses are 20% of the selling price. If total fixed expenses are $66,000, the degree of operating leverage is: Multiple Choice 9.50 2.07 1.90 7.60

7.6

what is a segment?

A segment is any part or activity of an organization about which a manager seeks cost, revenue, or profit data.

how do you find NOI

CM-fixed expense

The degree of operating leverage is computed by dividing sales by the contribution margin. T/F

FALSE

The margin of safety percentage is equal to the margin of safety in dollars divided by total contribution margin. T/F

FALSE

The total volume in sales dollars that would be required to attain a given target profit is determined by dividing the target profit by the contribution margin ratio. T/F

FALSE

There are various budgets within the master budget. One of these budgets is the production budget. Which of the following BEST describes the production budget? It summarizes the costs of producing units for the budget period. It details the required raw materials purchases. It is calculated based on the sales budget and the desired ending inventory. It details the required direct labor hours.

It is calculated based on the sales budget and the desired ending inventory.

Define Operating Leverage

Operating leverage is a measure of how sensitive net operating income is to percentage changes in sales. It is a measure, at any given level of sales, of how a percentage change in sales volume will affect profits.

Margin of Safety in Dollars definition

The margin of safety in dollars is the excess of budgeted (or actual) sales over the break-even volume of sales.

how do you find the margin of safety in dollars?

Total Sales - Break Even Sales

how do you find unit CM

Unit contribution margin = Selling price per unit − Variable expenses per unit

The following data pertains to activity and maintenance cost for two recent periods: Activity level (units)8,0007,000 Maintenance cost$ 34,000$ 31,500 Maintenance cost is a mixed cost with both fixed and variable components. Using the high-low method, the cost formula for maintenance cost is: Y = $4.25 X Y = $2,500 + $4.25 X Y = $14,000 + $2.50 X Y = $4.50 X

Y = $14,000 + $2.50 X

how do you find operating leverage?

cm/n.o.i

how do you find the margin of safety in units?

margin of safety/selling price

how do you find CM

sales-V.E

how do you find the margin of safety in %?

whatever % divided by the found margin of safety