Managerial Accounting Homework Chapter 3

When sales price decreases and all other variables are held constant, the break-even point will ________. a. increase b. remain unchanged c. produce a higher contribution margin d. decrease

a. increase

Waskowski Company sells three products (A, B, and C) with a sales mix of 3:2:1. Unit sales price are shown. What is the sales price per composite unit? Product A $7 Product B $4 Product C $6 a. $17.00 b. $35.00 c. $25.00 d. $20.00

b. $35.00

A company sells two products, Model 101 and Model 202. For every one unit of Model 101, they sell they sell two units of Model 202. Sales and cost information for the two products is shown. What is the contribution margin for a composite unit based on the sales mix? Model # Sales Price Variable Cost #101 $25 $11 #202 $28 $ 7 a. $35 b. $56 c. $14 d. $21

b. $56

If a firm has a contribution margin of $78,090 and a net income of $13,700 for the current month, what is their degree of operating leverage? a. 0.21 b. 5.7 c. 2.4 d. 1.21

b. 5.7

Jabari​ Manufacturing, a widgets manufacturing​ company, divides its production operations into three processes—Department 1, Department​ 2, and Department 3. The company uses a process costing system. Jabari incurred the following costs during the year to produce 4,500 ​units: Department 1 $17,000 Department 2 ​$9,000 Department 3 ​$7,000 If Jabari could sell only 3,600 units during the​ year, what will be the cost per unit of widget​ produced? (Round your answer to the nearest​ cent.) a. $5.78 b. $9.17 c. $7.33 d. $3.78

c. $7.33

A company's product sells for $150 and has variable costs of $60 associated with the product. What is its contribution margin ratio? a. 10% b. 90% c. 40% d. 60%

d. 60%

A company has pre-tax or operating income of $120,000. If the tax rate is 40%, what is the company's after-tax income? a. $240,000 b. $48,000 c. $300,000 d. $72,000

d. 72,000

The amount of a unit's sales price that helps to cover fixed expenses is its ________. a. profit b. contribution margin c. stepped cost d. variable cost

b. contribution margin

Company A wants to earn $5,000 profit in the month of January. If their fixed costs are $10,000 and their product has a per-unit contribution margin of $250, how many units must they sell to reach their target income? a. 120 b. 60 c. 40 d. 20

b. 60

When fixed costs decrease and all other variables remain unchanged, the break-even point will ________. a. produce a lower contribution margin b. increase c. decrease d. remain unchanged

c. decrease