Management Accounting

Bergman Ltd has the following product information available: Sales price=$12 per unit Variable costs=$4 per unit Fixed costs=$15,600 Units sold=10,400 What is the break-even point in units?

1,950

Sam has a small watch shop selling only one type of watch which is very popular with students as it looks fantastic. Variable costs for each watch are $50. Fixed costs for the shop are $3,000 per month. Selling price is $80 per watch. Sam wants to make a $2,700 profit per month. How many watches does she need to sell to achieve this profit?

190

In measuring unit variable cost, CVP analysis includes: Select one: a. Both variable production and variable selling/distribution costs. b. Only variable production costs. c. Only variable distribution and selling costs. d. Only variable and semi-variable production costs.

a. Both variable production and variable selling/distribution costs

A plan showing the units of goods expected to be sold and the expected revenue from sales is called the: Select one: a. Sales budget b. Cash receipts budget c. Cash budget d. Sales receipts budget

a. Sales budget

The contribution margin ratio is calculated as: Select one: a. total contribution margin divided by total revenues b. total contribution margin divided by total variable costs c. total variable costs divided by contribution margin d. income divided by contribution margin

a. total contribution margin divided by total revenues

Bergman Ltd has the following product information available: Sales price=$12 per unit Variable costs=$4 per unit Fixed costs=$15,600 Units sold=10,400 How many units need to be sold in order to earn a target profit of $150,000? Select one: a. 25,477 b. 20,700 c. 10,350 d. 18,750

b. 20,700

Budgeted sales for the first quarter for Cullison Company, a retailer, are as follows: Budgeted Sales (units) January=150,000 February=200,000 March=220,000 Cullison started the year with an inventory of 15,000 units. The company likes to maintain an inventory equal to 10% of next month's budgeted sales. Budgeted purchases in units for February would be: a. 200,000 b. 202,000 c. 220,000 d. 222,000

b. 202,000

Use the following information to answer the question: Selling price per unit=$200 Variable manufacturing costs per unit=$ 50 Fixed manufacturing costs per unit=$ 60 Variable selling costs per unit=$ 40 Fixed selling costs per unit=$ 20 Expected production and sales=800 units Contribution margin ratio is: a. 75% b. 55% c. 45% d. 15%

b. 55%

The Kelsey Company sells a product for $10. Budgeted sales for the first quarter of next year are as follows: Budgeted Sales January=$400,000 February=$600,000 March=$700,000 The company wants to maintain an inventory of finished units equal to 30% of the following month's sales and 12,000 units are on hand at the beginning of the year. Each unit requires 2 kilograms of raw material costing $1 per kg. The company maintains a raw materials inventory equal to 10% of the following month's production needs. Budgeted production in units for February would be: Select one: a. 60,000 b. 63,000 c. 81,000 d. 99,000

b. 63,000

Projected sales for Tony Co. Ltd for next year and beginning and ending inventory data are as follows: Sales=20,000 units Beginning Inventory=1,000 units Targeted ending inventory=5,000 units The selling price is $15 per unit. Each unit requires 3 kilograms of material which costs $2 per kg. The beginning inventory of raw materials is 3,000 kg. The company wants to have 2,400 kg of material in inventory at the end of the year. The budgeted total purchase cost of direct materials would be: Select one: a. $144,000 b. $118,800 c. $142,800 d. $145,200

c. $142,800

Becham Company has the following purchases budgeted for the last quarter of this year: October=$75,000 November=$90,000 December=$84,000 Becham pays one-half of a month's purchases in the month of purchase and the remainder in the following month. What are expected cash disbursements for the month of December? Select one: a. $124,500 b. $84,000 c. $87,000 d. $42,000

c. $87,000

Which of the following statements is true when making decisions using cost-volume-profit (CVP) analysis? Select one: a. As long as the contribution margin is a positive number, net income will be positive b. As long as variable costs are more than fixed costs, net income will be negative c. As long as the contribution margin is greater than fixed costs, net income will be positive d. As long as the sales price per unit is greater than fixed costs per unit, net income will be positive

c. As long as the contribution margin is greater than fixed costs, net income will be positive

The first step in the budgeting process is the preparation of the: Select one: a. production budget b. sales budget c. sales forecast d. cash budget

c. Sales forecast

Projected sales for Tony Co. Ltd for next year and beginning and ending inventory data are as follows: Sales=20,000 units Beginning Inventory=1,000 units Targeted ending inventory=5,000 units The selling price is $15 per unit. Each unit requires 3 kilograms of material which costs $2 per kg. The beginning inventory of raw materials is 3,000 kg. The company wants to have 2,400 kg of material in inventory at the end of the year. According to the production budget, how many units should be produced?: a. 16,000 b. 20,000 c. 21,000 d. 24,000

d. 24,000

All else being equal, which of the following would cause the contribution margin to increase? Select one: a. An increase in variable costs per unit b. An increase in total variable costs c. A decrease in total fixed costs d. An increase in sales volume

d. An increase in sales volume