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Joe's Tuxedos has monthly fixed costs of $12,000. The variable costs of sales are 60%. What is the break-even monthly sales revenue?

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Question 1 (5 points)

 Joe's Tuxedos has monthly fixed costs of $12,000. The variable costs of sales are 60%. What is the break-even monthly sales revenue?

 

A) $20,000

B) $30,000

C) 19,200

D) $7,200 

                    

Question 2 (5 points)

Delta Manufacturing has sales of $2,000,000 with direct materials cost of $400,000, direct labor of $280,000, variable overhead of $120,000, and fixed costs of $300,000. What is Delta's contribution margin percentage?

 

A) 40%

B) 55%

C) 60%

D) 45%

 

Question 3 (5 points)

If a company has a 45% contribution margin ratio and has fixed costs of $250,000, how much sales does it need to earn a gross profit of $200,000?

 

A) $1,000,000

B) $555,556

C) $818,182

D) $652,500

 

Question 4 (5 points)

Leisure Products management wants to ensure that each product makes a profit. The company produced a hammock that sold 3,500 units at $80 per unit. The variable cost of production was $36 per unit. The fixed costs were $110,000. What was the margin of safety?

 

A) $54,000

B) $80,000

C) $126,000

D) $20,000

 

Question 5 (5 points)

Oregon State Lumber Inc. purchased and used 126,000 board feet of lumber in production, at a total cost of $1,449,000. Original production had been budgeted for 22,000 units with a standard material quantity of 5.5 board feet per unit and a standard price of $12 per board foot. Actual production was 23,000 units.

 

Compute the material price variance.

 

A) $63,000 F

B) $63,000 U

C) $6,000 F

D) $6000 U

 

Question 6 (5 points)

Please review the following information involving labor costs for the current period:

 

Standard costs

9,000 hours at $5.50

Actual costs

8,750 hours at $5.75

 

Compute the direct labor rate variance?

A) $2,250.00 unfavorable

B) $2,187.50 unfavorable

C) $1,438.00 favorable

D) $1,375.00 favorable

 

Question 7 (5 points)

Roscoe Enterprises has sales for a three-month period as follows: May, $240,000; June, $280,000; July, $275,000. All sales are on account, and history has shown that accounts receivable are typically collected 10% in the month of the sale, 60% in the month after the sale, and 30% two months after the sale. What are Roscoe's expected cash collections in the month of July?

 

A) $267,500

B) $172,000

C) 275,000

D) $280,000

 

Question 8 (5 points)

Mega Manufacturing has a budget to sell 100,000 units of a certain product at a selling price of $35 per unit. Variable costs for materials, labor, and overhead are $18 per unit. Fixed cost is $800,000. Actual sales were 110,000 units, and management would like to see actual manufacturing performance compared to a budget adjusted for volume (flexible budget). What would be the adjusted budgeted operating profit?

 

A) $1,870,000

B) $900,000

C) $1,070,000

D) $990,000

 

Question 9 (5 points)

A company president wants the chief financial officer to tell him how many sales are required to make a $1,000,000 operating profit. Variable production costs are 70% of sales, and fixed costs are $2,750,000. What are the required sales, rounded to the closest dollar?

 

A) $8,750,000

B) $5,357,143

C) $9,166,667

D) $12,500,000

 

Question 10 (5 points)

Top Dog Company has a budget with sales of 5,000 units and $3,200,000. Variable costs are budgeted at $1,750,000, and fixed overhead is budgeted at $900,000. What is the budgeted manufacturing cost per unit?

 

A) $350

B) $530

C) $640

D) $460

 

Question 11 (5 points)

Zarena was reviewing the water bill for her dog day care and spa and determined that her highest bill, $3,800, occurred in May when she washed 400 dogs and her lowest bill, $2,400, occurred in November when she washed 200 dogs. What was the variable cost per dog associated with Zarena’s water bill?

 

A) $6.00

B) $12.00

C) $9.50

D) $7.00

 

Question 12 (5 points)

 Alaska King Crabs Inc. has provided the following information for the month of December:

 

 

King Crabs

King Crab Legs

Estimated beginning inventory

  30,000 units

  18,000 units

Desired ending inventory

  32,000 units

  15,000 units

Region I, anticipated sales

320,000 units

260,000 units

Region II, anticipated sales

190,000 units

130,000 units

 

The unit selling price for product King Crabs is $5 and for product King Crab Legs is $14. Budgeted sales for the month are:

 

 

A) $2,040,000

 

B) $4,680,000

 

C) $6,692,000

 

D) $8,010,000 0715957606

 

Question 13 (5 points)

Vatsala sells hand-knit scarves at the flea market. Each scarf sells for $25.Vatsala pays $30 to rent a vending space for one day. The variable costs are $15 per scarf. What total revenue amount does she need to earn to break even?

 

 

A) $85

 

B) $75

 

C) $50

 

D) $100

 

Question 14 (5 points)

Brielle Company sells glass vases at a wholesale price of $2.50 per unit. The variable cost of manufacture is $1.75 per unit. The monthly fixed costs are $7,500. Brielle’s current sales are 25,000 units per month. If Brielle wants to increase operating income by 20%, how many additional units, must Brielle sell? (Round your intermediate calculations to two decimal places)

 

 

A) 145,000 glass vases

 

B) 7,500 glass vases

 

C) 13,500 glass vases

 

D) 3,000 glass vases

 

Question 15 (5 points)

Venkat Company has provided the following information regarding the two products that it sells:

 

                                             Jet Boats             Ski Boats

 

Sales Price per unit                $8000                $20000

Variable Cost per unit             4800                   14000

 

Annual fixed costs are $280,000.

 

How many units must be sold in order for Venkat to breakeven, assuming that Venkat sells five jet boats for every two ski boats sold?

 

 

A) 70 jet boats and 28 ski boats

 

B) 50 jet boats and 20 ski boats

 

C) 20 jet boats and 50 ski boats

 

D) 45 jet boats and 28 ski boats

 

Question 16 (5 points)

White Marsh Company has prepared the following sales budget:

 

Month          Budgeted Sales

March          $200,000

April              180,000

May               220,000

June              260,000

 

Cost of goods sold is budgeted at 60% of sales and the inventory at the end of February was $36,000. Desired inventory levels at the end of each month are 20% of the next month's cost of goods sold. What is the desired beginning inventory on June 1?

 

 

A) $52,000

 

B) $26,400

 

C) $43,200

 

D) $31,200

 

Question 17 (5 points)

EZ Financing   Inc. has prepared the operating budget for the first quarter of 2015. They forecast sales of $50,000 in January, $60,000 in February, and $70,000 in March. Variable and fixed expenses are as follows:

 

Variable: Power cost (40% of Sales)

Miscellaneous expenses: (5% of Sales)

Fixed: Salary expense: $8,000 per month

Rent expense: $5,000 per month

Depreciation expense: $1,200 per month

Power cost/fixed portion: $800 per month

Miscellaneous expenses/fixed portion: $1,000 per month

 

Calculate total selling and administrative expenses for the month of January.

 

 

A) $38,500

 

B) $47,500

 

C) $41,700

 

D) $43,000

 

Question 18 (5 points)

Mumbai Inc. has prepared the following purchases budget:

 

Month                          Budgeted Purchases

 

JUNE                                             $67,000

JULY                                                72,500

AUGUST                                          76,300

SEPTEMBER                                    73,700

OCTOBER                                        69,200

 

All purchases are paid for as follows: 10% in the month of purchase, 50% in the following month, and 40% two months after purchase. Calculate total cash payments made in October for purchases.

 

 

A) $72,630

 

B) $70,680

 

C) $70,520

 

D) $74,290

 

Question 19 (5 points)

Mumbai Inc. has prepared the following purchases budget:

 

Month                          Budgeted Purchases

 

JUNE                                             $67,000

JULY                                                72,500

AUGUST                                          76,300

SEPTEMBER                                    73,700

OCTOBER                                        69,200

 

All purchases are paid for as follows: 10% in the month of purchase, 50% in the following month, and 40% two months after purchase. Calculate balance of Accounts payable at the end of October.

 

 

A) $77,680

 

B) $91,760

 

C) $69,330

 

D) $74,290

 

Question 20 (5 points)

The budgeted production of Fells Point Inc. is 8,000 units. Each unit requires 40 minutes of direct labor work to complete. The direct labor rate is $100 per hour. Calculate the budgeted cost of direct labor for the month.

 

 

A) $533,333.33

 

B) $500,000.00

 

C) $566,666.66

 

D) $633,333.33

 

 

 

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