33.)Sonoma Winery has fixed costs of $12,000 per year. Its warehouse sells wine

Question

33.)Sonoma Winery has fixed costs of $12,000 per year. Its warehouse sells wine with variable costs of 80% of its unit selling price. How much in sales does Sonoma need to break even per year? Answer A. $15,000 B. $2,400 C. $60,000 D. $9,600 39.) How much sales are required to earn a target net income of $96,000 if total fixed costs are $120,000 and the contribution margin ratio is 40%? Answer A. $540,000 B. $486,000 C. $240,000 D. $300,000 2.5 points Question 40 40.) Jenks Corporation reported sales of $2,000,000 last year (100,000 units at $20 each), when the break-even point was 80,000 units. Jenks' margin of safety ratio is Answer A. 25%. B. 80%. C. 120%. D. 20%.

Explanation / Answer

33.)Sonoma Winery has fixed costs of $12,000 per year. Its warehouse sells wine with variable costs of 80% of its unit selling price. How much in sales does Sonoma need to break even per year? Answer A. $15,000 B. $2,400 C. $60,000 D. $9,600 12,000/(1-.80) = 60,000 Answer: C, $60,000 39.) How much sales are required to earn a target net income of $96,000 if total fixed costs are $120,000 and the contribution margin ratio is 40%? Answer A. $540,000 B. $486,000 C. $240,000 D. $300,000 2.5 points Question 40 40.) (96,000 + 120,000)/.40 = 540,000 Answer: A, $540,000 Jenks Corporation reported sales of $2,000,000 last year (100,000 units at $20 each), when the break-even point was 80,000 units. Jenks' margin of safety ratio is Answer A. 25%. B. 80%. C. 120%. D. 20%. (100,000 – 80,000)/100,000 = 20% Answer: D, 20%

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