StudentInstructions

Assignment InstructionsQuiz: 9Please do not (otherwise you will jeopardise the grading process): -rename this workbook -rename any sheets -insert any columns into a sheet -insert any rows into a sheet

Read the Multiple Choice questions carefully and do the following:You have to complete every cell colored yellowFor every cell colored yellow, choose the appropriate response from the dropdown

The initial due date/time for this assignment is Friday, March 27, 2015 --- 5:00:00 PM

MultipleChoiceMC-00109038The sales and cost data for two companies in the transportation industry are as follows:

X CompanyY CompanyAmountPercentAmountPercentSales$139,000100.00$139,000100.00Variable costs$81,90058.92$41,60029.93Contribution margin$57,10041.08$97,40070.07Fixed costs$41,600$81,900Operating Income$15,500$15,500

Y Company's margin of safety (MOS) in sales dollars is calculated to be (rounded):

A.$23,226$81,90010.2992805755B.$37,732116879.876796715C.$41,505$22,120D.$39,619E.$22,120Answer:E.

MC-00209042Staley Co.'s operating income is calculated to be:

Per UnitPercent57000Sales price$460.00100.00Variable costs$299.0065.0037050Unit contribution margin$161.0035.00$16,380.0019950

Assume that Staley Co. is currently selling 580 computer monitors per month and monthly fixed costs are $77,000.

If an $17,100 increase in the advertising budget would increase monthly sales by $57,000, the new level of operating income for Staley Co would be:

A.$18,269$323,800.00B.$21,153$223,470.00C.$17,307$100,330.00$19,230.00D.$19,230E.$20,192Answer:D.

MC-00309090Which of the following statements regarding CVP analysis is TRUE?

A.It is impossible to apply when there are multiple products sold by the firm in questionB.It relies on the use of regression analysis to solve for the point of optimum profitC.Because of cost-structure issues, it cannot be used in a service settingD.It cannot be used in conjunction with activity-based costing (ABC)E.It is a short-term profit-planning toolAnswer:E.

MC-00409010The CVP profit-planning model assumes that over the relevant range of activity:

A.Both revenues and total costs are linearB.Only revenues and fixed costs are linearC.Only revenues are linearD.Variable cost per unit decreases because of increases in productivityE.Only revenues and variable costs are linearAnswer:A.

MC-00509063The following information pertains to Korning Corp:

Selling price per unit$710Variable cost per unit$262Total fixed costs$343,950Income tax rate36%

How many total units must be sold to obtain an after-tax profit of $50,950?

A.945$448$423,559$79,609.3850950B.851C.993D.898Answer:A.

MC-00609034In the current year, Becker Sofa Company expected to sell 13,400 leather sofas. Fixed costs for the year were expected to be $9,270,000; unit sales price was budgeted at $5,120; and unit variable costs were expected to be $2,410.

Becker Sofa Company's margin of safety (MOS) in units is:

A.10,97751094199.2619926B.11,4769979.3357933579C.10,029D.9,480E.9,979Answer:E.

MC-00709080Cleaning Care Inc. expects to sell 10,000 mops. Fixed costs (for the year) are expected to be $10,000, unit sales price is expected to be $11.00, and unit variable costs are budgeted at $7.00.

Cleaning Care's margin of safety ratio (MOS%) is:

A.21%B.71%C.25%D.79%E.75%Answer:C.

MC-00809029During the current year, OutlyTech Corp. expected to sell 24,500 telephone switches. Fixed costs for the year were expected to be $12,403,000, the unit sales price was budgeted at $3,230, and unit variable costs were budgeted at $1,472.

OutlyTech's margin of safety (MOS) in sales dollars is:

A.$61,981,4582450042300B.$56,346,7801240300022788219.567690610385219.567690616400004232185.79234973C.$59,164,119323017587055.17633674630.4557275542377814641120.218579235D.$70,433,47614720.544272445817444.823663253723140.387506617341179.781420765E.$67,616,13756346780.4323094Answer:B.

MC-00909046Crown Co. can produce two types of lamps, the Enlightner and Foglighter. The data on the two lamp models are as follows:

EnlightnerFoglighterSales volume in units52042094055%45%Unit sales price$320.00$420.0074043.243%56.7568%$166,400$176,400$342,800$364.68Unit variable cost$210.00$249.0045946%54%$109,200$104,580$213,780Unit contribution margin$110.00$171.0028139%61%$57,200$71,820$129,020$94,000$249,7540.343750.40714285710.3763710618$685It takes one machine hour to produce each product. Total fixed costs for the manufacture of both products are $94,000. Demand is high enough for either product to keep the plant operating at maximum capacity.

Assuming that sales mix remains constant in units, what is the breakeven point in total units? (Round intermediate calculations to 2 decimal places and final answer to the nearest whole number)

A.754B.651C.719D.6850.69577E.788Answer:D.

MC-01009040The sales and cost data for two companies in the transportation industry are as follows:

X CompanyY CompanyAmountPercentAmountPercentSales$123,000100.00$123,000100.00Variable costs$74,40060.49$37,40030.41Contribution margin$48,60039.51$85,60069.59Fixed costs$37,400$74,400Operating Income$11,200$11,200

X Company's degree of operating leverage (DOL) at the current sales volume level is calculated to be:

A.4.774.3392857143B.4.34C.4.12D.4.56E.3.91Answer:B.

MC-01109056Cost-volume-profit (CVP) relationships that are curvilinear may be analyzed linearly by considering only:

A.A relevant range of volumeB.Relevant fixed costsC.The multi-product/multi-service contextD.Relevant variable costsE.Fixed and semi-variable costsAnswer:A.

MC-01209021Grant's Western Wear is a retailer of western hats located in Atlanta, Georgia. Although Grant's carries numerous styles of western hats, each hat has approximately the same price and invoice purchase cost, as shown below. Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts. Currently the economy of Atlanta is really humming, and sales growth at Grant's has been great. However, the business is very competitive, and Grant has relied on its knowledgeable and courteous staff to attract and retain customers, who otherwise might go to other western wear stores. Also, because of the rapid growth in sales, Grant is finding it more difficult to manage certain aspects of the business, such as restocking of inventory and hiring and training new salespeople.Sales$34.0023500$799,000Per-unit variable costsInvoice cost$17.90$420,650Sales commissions$5.20$122,200Total per unit variable costs$23.10$542,850Total annual fixed costs$256,150Advertising$22,700Rent$29,000Salaries$120,600Total fixed costs$172,300$83,850If 23,500 hats were sold, Grant's operating income would be:

A.$83,012B.$104,813C.$110,682D.$83,850E.$92,235Answer:D.

MC-01309073Which of the following illustrates how the level of operating profit changes over different levels of output/sales volume?

A.Revenue-cost graphB.Revenue-volume graphC.Profit-volume graphD.Cost-revenue chartE.Profit-cost graphAnswer:C.

MC-01409036In the current year, Becker Sofa Company expected to sell 11,800 leather sofas. Fixed costs for the year were expected to be $8,390,000; unit sales price was budgeted at $4,540; and unit variable costs were expected to be $2,220.

Becker Sofa Company's margin of safety ratio (MOS%) is (rounded to two decimal places):

A.69.35%1180053,572,000B.76.29%8390000C.69.70%4540232016,418,3620.6935271771D.83.22%22200.511013215937,153,638E.72.82%Answer:A.

MC-01509005CVP analysis using activity-based costs will tend to shift some costs from fixed to variable classifications, resulting in:

A.Higher or lower breakeven sales, depending on batch sizeB.A higher contribution margin per unitC.Higher breakeven salesD.Lower breakeven salesE.A lower contribution margin per unitAnswer:A.

MC-01609088Which of the following is a technique most suited to deal with uncertainty regarding the inputs to a CVP (profit-planning) model?

A.Net present value (NPV) analysisB.Linear programmingC.Regression analysisD.Sensitivity analysisE.Constrained optimization analysisAnswer:D.

MC-01709103Grant's Western Wear is a retailer of western hats located in Atlanta, Georgia. Although Grant's carries numerous styles of western hats, each hat has approximately the same price and invoice purchase cost, as shown below. Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts. Currently the economy of Atlanta is really humming, and sales growth at Grant's has been great. However, the business is very competitive, and Grant has relied on its knowledgeable and courteous staff to attract and retain customers, who otherwise might go to other western wear stores. Also, because of the rapid growth in sales, Grant is finding it more difficult to manage certain aspects of the business, such as restocking of inventory and hiring and training new salespeople.Examine these two charts.

Total RevenueTotal CostTotal RevenueTotal Cost$0ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!$0.00ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!$0.00ERROR:#DIV/0!ERROR:#DIV/0!$0.00ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!$0.00ERROR:#DIV/0!ERROR:#DIV/0!$0.00ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!$0.00ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!

Which cost strategy has the lower operating leverage?

A.Cost strategy AB.Cost strategy A and B have same fixed costC.No feasible answerD.Cost strategy B has no fixed costE.Cost strategy BAnswer:E.

MC-01809096Examine this algebra.

What does this algebraic model represent?

A.Profit after taxB.Operating profitC.Contribution margin per unitD.Profit before taxE.Total contribution marginAnswer:B.

MC-01909086Income taxes have the following effect on the breakeven point calculation:

A.They generally increase the breakeven pointB.They have no effect on the breakeven pointC.They generally decrease the breakeven pointD.They may increase or decrease the breakeven point, depending on the cost structure of the organizationE.They increase the variable cost per unitAnswer:B.

MC-02009006Calculating the margin of safety (MOS) measure will help a firm answer which of the following questions?

A.Will we break even?B.How much profit will we earn?C.How much will profits change if sales change?D.Are we using our debt wisely?E.How much revenue can we lose before we drop below the breakeven point?Answer:E.

MC-02109007A relatively low margin of safety ratio (MOS%) for a product is usually an indication that the product:

A.Has a high contribution marginB.Is riskier than a product with a higher margin of safety ratioC.Is less risky than a product with a higher margin of safety ratioD.Requires heavy fixed cost to produce or sellE.Is losing moneyAnswer:C.

MC-02209100Grant's Western Wear is a retailer of western hats located in Atlanta, Georgia. Although Grant's carries numerous styles of western hats, each hat has approximately the same price and invoice purchase cost, as shown below. Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts. Currently the economy of Atlanta is really humming, and sales growth at Grant's has been great. However, the business is very competitive, and Grant has relied on its knowledgeable and courteous staff to attract and retain customers, who otherwise might go to other western wear stores. Also, because of the rapid growth in sales, Grant is finding it more difficult to manage certain aspects of the business, such as restocking of inventory and hiring and training new salespeople.

Sales$34.000$0$0$175,200$175,200-$175,200Per-unit variable costsCVP Graph5,000$170,000$116,000$175,200$291,200-$121,200Invoice cost$18.0010,000$340,000$232,000$175,200$407,200-$67,200Sales commissions$5.20500015,000$510,000$348,000$175,200$523,200-$13,200Total per unit variable costs$23.2020,000$680,000$464,000$175,200$639,200$40,800Total annual fixed costs25,000$850,000$580,000$175,200$755,200$94,800Advertising$22,90030,000$1,020,000$696,000$175,200$871,200$148,800Rent$29,000Salaries$123,300Total fixed costs$175,200

The annual breakeven point in unit sales is approximately:

A.14,360B.16,222C.18,312D.12,674E.20,534Answer:B.

MC-02309098Examine this algebra.

What does this algebraic model represent?

A.Variable cost planningB.Total contribution marginC.Profit planningD.Contribution margin per unitE.Revenue planningAnswer:E.

MC-02409078Cleaning Care Inc. expects to sell 10,000 mops. Fixed costs (for the year) are expected to be $10,000, unit sales price is expected to be $11.00, and unit variable costs are budgeted at $6.00.

Cleaning Care's margin of safety (MOS) in units is:

A.7,50010000110000B.8,40010000C.7,60011522000D.8,00060.4545454545880008000E.7,200Answer:D.

MC-02509094Examine this diagram.

What does this diagram represent - choose the best answer.

A.Illustrates how the levels of revenues and total costs change over different levels of sales volume expressed in units.B.The Profit- Volume GraphC.Illustrates how the levels of revenues and total costs change over different levels of sales volume expressed in units.D.The CVP GraphE.None of the aboveAnswer:B.

MC-02609018Which of the following is not an underlying assumption of a conventional CVP analysis?

A.Learning-curve effects (ie, productivity gains with experience)B.Variable costs per unit are unrelated to changes in volumexC.Selling price per unit is unrelated to assumed sales volumexD.Inputs to the profit-planning model are known with certaintyxE.Fixed costs, in total, do not change as sales mix or total sales volume changexAnswer:A.

MC-02709072Cathy's Towels sells three items (which it purchases from a supplier): bath towels, hand towels, and washcloths in a 4:3:2 mix (thus, a batch of 9 towels has 4 bath towels, 3 hand towels, and 2 washcloths). Each bath towel sells for $10.80 and costs $4.30, each hand towel sells for $5.40 and costs $2.10; and each washcloth sells for $2.70 and costs $1.10 The shop's annual fixed expenses are $351,200$, and the income tax rate is 40.00% How many bath towels must the firm sell at the breakeven point?

A.62,875B.35,928C.17,96418.9D.45,9100.571428571430.812.85E.26,9460.285714285717.95Answer:B.0.142857142919565.4596100279180039130.9192200557

MC-02809049Kelvin Co. produces and sells socks. Variable costs are budgeted at $4.40 per pair, and fixed costs for the year are expected to total $101,000. The selling price is expected to be $6.60 per pair.

The sales dollars required for Kelvin Co to make a before-tax profit of $11,000 are:

A.$336,000B.$369,600C.$352,800D.$386,400E.$319,200Answer:A.

MC-02909039The sales and cost data for two companies in the transportation industry are as follows:

X CompanyY CompanyAmountPercentAmountPercentSales$120,000100.00$120,000100.00Variable costs$72,00060.00$35,70029.75Contribution margin$48,00040.00$84,30070.25Fixed costs$35,700$72,000Operating Income$12,300$12,300

X Company's margin of safety ratio (MOS%) is calculated to be:

A.13.86%$48,0000.4B.26.91%$89,250C.24.34%$30,750D.14.59%0.25625E.25.63%Answer:E.

MC-03009104Grant's Western Wear is a retailer of western hats located in Atlanta, Georgia. Although Grant's carries numerous styles of western hats, each hat has approximately the same price and invoice purchase cost, as shown below. Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts. Currently the economy of Atlanta is really humming, and sales growth at Grant's has been great. However, the business is very competitive, and Grant has relied on its knowledgeable and courteous staff to attract and retain customers, who otherwise might go to other western wear stores. Also, because of the rapid growth in sales, Grant is finding it more difficult to manage certain aspects of the business, such as restocking of inventory and hiring and training new salespeople.Examine these two charts.

Total RevenueTotal CostTotal RevenueTotal Cost$0ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!$0.00ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!$0.00ERROR:#DIV/0!ERROR:#DIV/0!$0.00ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!$0.00ERROR:#DIV/0!ERROR:#DIV/0!$0.00ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!$0.00ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!ERROR:#DIV/0!

After breakeven point which cost strategy increases profit more rapidly.

A.Cost strategy BB.Cost strategy AC.Cost strategy A and B have same fixed costD.No feasible answerE.Cost strategy B has no fixed costThe company's breakeven is Answer:B.

MC-03109071Label Corp recorded sales of $2,282,198 The company's breakeven sales point (in dollars) is $1,655,000 and its margin of safety ratio (MOS%) at the current sales level is 28.00% What sales are needed to increase the company's margin of safety ratio (MOS%) to 39.00%?

A.$2,577,4592282198B.$2,713,115165500028%62719827.5%C.$2,984,42639%922459.0163934430.4041976272D.$2,848,7701058114.754098360.4636384547Answer:A.1329426.22950820.58252010981193770.491803280.5230792823

MC-03209091Which of the following statements is true with respect to the degree of operating leverage (DOL)?

A.It provides a simple way to estimate the change in total fixed cost for a given change in sales volumeB.For most firms, it is relatively constant in amount as sales volume changesC.It can be calculated and used by manufacturing but not service firmsD.It is calculated as the amount of operating income (1 - t), where t = the income tax rateE.It is calculated as the ratio of contribution margin (CM) to operating incomeAnswer:E.

MC-03309012In measuring the variable cost per unit, CVP analysis includes:

A.Only variable distribution and selling costsB.Only variable production costsC.Only variable and semi-variable production costsD.Both variable production and variable selling/distribution costsAnswer:D.

MC-03409037The sales and cost data for two companies in the transportation industry are as follows:

X CompanyY CompanyAmountPercentAmountPercentSales$118,000100.00$118,000100.00Variable costs$71,10060.25$36,00030.51Contribution margin$46,90039.75$82,00069.49Fixed costs$36,000$71,100Operating Income$10,900$10,900

The annual breakeven point in sales dollars for X Company is:

A.$90,5760.3974576271B.$81,518$90,575.69C.$92,083D.$102,315E.$99,633Answer:A.

MC-03509014The contribution margin per unit multiplied by the number of units sold is the:

A.Total contribution margin (CM)B.Segment marginC.Contribution margin ratioD.Margin of safety (MOS)E.Breakeven pointAnswer:A.

MC-03609004The breakeven point is:

A.The sales volume at which the total contribution margin exceeds total variable costsB.The sales volume at which revenues equal total cost plus an operating profit of zeroC.The sales volume at which revenues equal variable cost and profit is zeroD.The point at which revenues meet the budget targetE.The sales volume at which revenues equal fixed cost and profit is zeroAnswer:B.

MC-03709043Staley Co.'s operating income is calculated to be:

Per UnitPercentSales price$509.00100.00Variable costs$334.0065.62Unit contribution margin$175.0034.38

Assume that Staley Co. is currently selling 640 computer monitors per month and monthly fixed costs are $86,000.

What is Staley Co's margin of safety (MOS), in units, if 640 units are sold and all costs and revenues are as budgeted? (Round intermediate calculation up to nearest whole number of units)

A.1410.3438B.492250145.433391507C.133$75,615D.148$0.23$148.56E.155Answer:D.

MC-03809019Grant's Western Wear is a retailer of western hats located in Atlanta, Georgia. Although Grant's carries numerous styles of western hats, each hat has approximately the same price and invoice purchase cost, as shown below. Sales personnel receive large commissions to encourage them to be more aggressive in their sales efforts. Currently the economy of Atlanta is really humming, and sales growth at Grant's has been great. However, the business is very competitive, and Grant has relied on its knowledgeable and courteous staff to attract and retain customers, who otherwise might go to other western wear stores. Also, because of the rapid growth in sales, Grant is finding it more difficult to manage certain aspects of the business, such as restocking of inventory and hiring and training new salespeople.Sales$40.00Per-unit variable costsInvoice cost$20.90Sales commissions$6.10Total per unit variable costs$27.00Total annual fixed costsAdvertising$27,200Rent$34,000Salaries$141,400Total fixed costs$202,600

The annual breakeven point in unit sales is calculated to be:

A.13,585$13.000.325B.15,58515584.6153846154C.16,585D.14,585E.17,585Answer:B.

MC-03909084The form of the income statement that is used in CVP analysis is referred to as:

A.A flexible-budget income statementB.A segment profitability reportC.An activity-based cost (ABC) income statementD.An absorption costing income statementE.A contribution income statementAnswer:E.

MC-04009067EZ Carry Corp is the maker of high quality golf bags. They currently have three different lines of bags, which they sell to sporting goods and golf shops throughout the world EZ Carry sells a constant mix of 4 small bags for each medium-sized bag and 5 medium bags for each large-sized bag. Total fixed costs for the year are expected to be $2,058,723 (Note: round all decimals to three decimal places)

SmallMediumLargeSelling price per bag$100$154$256Variable cost per bag$61$99$162205126The breakeven point in units (for the year) would be:

A.36,335 small, 8,709 medium, 1,667 large1520262058723B.35,335 small, 8,709 medium, 1,667 large0.03846153850.19230769230.76923076921C.36,335 small, 9,209 medium, 1,917 large$94$55$39188D.35,835 small, 8,959 medium, 1,792 large$3.62$10.58$30.0044.1923076923Answer:D.1791.75195822458958.759791122735835.039164490946585.550913838100

MC-04109045Staley Co.'s operating income is calculated to be:

Per UnitPercentSales price$452.00100.00570Variable costs$286.0063.2776000Unit contribution margin$166.0036.73

Assume that Staley Co. is currently selling 570 computer monitors per month and monthly fixed costs are $76,000.

What is Staley Co's degree of operating leverage (DOL) at this sales volume? (Round your answer to three decimal places)

A.4.929$18,620B.5.08294620C.4.980$5.0816D.5.031E.4.878Answer:B.

MC-04209032For the current year, Power Cords Corp. expected to sell 43,500 industrial power cords. Fixed costs were expected to total $1,702,000; unit sales price was expected to be $3,827; and unit variable costs were budgeted at $2,329.

Power Cord Corp's margin of safety (MOS) in sales dollars is:

A.$186,445,28343500166,474,500B.$170,232,65038271,500C.$162,126,33323270.3920D.$194,551,60017020004,342,369E.$145,913,700162,132,131Answer:C.

MC-04309059Cost/volume/profit (CVP) analysis is a technique available to management to understand better the interrelationships of several factors that combine to determine a firm's profit. As with many such techniques, the accountant oversimplifies the real world by making assumptions Which of the following is not a major assumption underlying CVP analysis?

A.Operating efficiency and employee productivity are constant at all volume levelsxB.The product selling price per unit is affected by changes in volume levelsxC.In multi-product situations, the sales mix changes as volume changesD.Total costs vary only with changes in sales volumeE.All costs incurred by a firm can be separated into their fixed and variable componentsxAnswer:C.

MC-04409035In the current year, Becker Sofa Company expected to sell 11,600 leather sofas. Fixed costs for the year were expected to be $8,140,000; unit sales price was budgeted at $4,470; and unit variable costs were expected to be $2,120.

Becker Sofa Company's margin of safety (MOS) in sales dollars is:

A.$34,550,2471160051,852,000B.$36,368,68144702,350C.$41,823,98321201D.$36,550,524814000015,483,319E.$34,732,09036,368,681Answer:B.

MC-04509092UCF Watch Corp is the maker of quality watches. They currently have three different watches, which they sell to tourist shops throughout Florida. UCF Watch sells a constant mix of 5 MickeyWatches for each UniversalWatch and 3 UniversalWatch for each SeaWorldWatch. Total fixed costs for the year are expected to be $1,815,000

MickeyWatchesUniversalWatchSeaWorldWatchSelling price per bag$89.3$136.6$228.5Variable cost per bag$54.9$86.6$146.0x5x15x153119The breakeven point in units (for the year) would be:0.78947368420.15789473680.05263157891$89.3$136.6$228.5454.4A.2,425MickeyWatches7,275UniversalWatch36,373SeaWorldWatch$54.9$86.6$146.0287.5B.7,275MickeyWatches2,425UniversalWatch36,373SeaWorldWatch$34.40$50.00$82.50166.9C.36,373MickeyWatches7,275UniversalWatch2,425SeaWorldWatch$27.16$7.89$4.3439.39473684211815000D.7,275MickeyWatches36,373UniversalWatch2,425SeaWorldWatch36372.7454909827274.54909819642424.849699398846072.144288577146072.1442885771E.None of the above0Answer:C.

MC-04609052Framing House, Inc. produces and sells picture frames. Variable costs are expected to be $15.00 per frame; fixed costs for the year are expected to total $120,000. The budgeted selling price is $23.00 per frame.

The sales units required by Framing House to make a before-tax profit of $13,600 are calculated to be:

A.16,366238B.16,032150.347826087C.15,364120000384100D.16,7001360016700E.15,698133600Answer:D.

MC-04709082Calculating the margin of safety (MOS) measure will help a firm answer which of the following questions?

A.Are we using our debt wisely?B.How much revenue can we lose before we drop below the breakeven point?C.How much profit will we earn?D.Will we break even?E.How much will profits change if sales change?Answer:B.

MC-04809031For the current year, Power Cords Corp. expected to sell 48,400 industrial power cords. Fixed costs were expected to total $1,893,000; unit sales price was expected to be $4,267; and unit variable costs were budgeted at $2,596.

Power Cords Corp's margin of safety (MOS) in units is:

A.47,26748400206522800B.40,17742671671C.54,35725960.3916100305D.44,90418930004833890.48473968E.42,540201688909.5152647267.145421903Answer:A.

MC-04909089Which of the following formulas can be used to represent targeted pretax profit, B, as a function of targeted after-tax profit, A, given an effective income tax rate of t?

A.B = A (1 + t)B.B = A (1 - t)C.B = (1 + t) AD.B = A (1 - t)E.B = FC (1 - t)Answer:B.

MC-05009013The difference between sales price per unit and variable cost per unit is the:

A.Breakeven pointB.Margin of safety (MOS)C.Contribution margin ratioD.Total contribution margin (CM)E.Contribution margin per unit (cm)Answer:E.