236,300 151,000 85,300 141,000 65,000 76,000 42,000 47,200 $54,200 1. Smith Comp

Question

236,300

151,000

85,300

141,000

65,000

76,000

42,000

47,200

$54,200

1. Smith Company sells a single product at a selling price of $30 per unit. Variable expenses are $12 per unit and fixed expenses are $115,920. Smith's break-even point is:
3,864 units
9,660 units
19,320 units
6,440 units

2. The Rial Company's income statement for June is given below: Total Division F Division L Sales $466,500 $258,000 $208,500 Variable expenses

236,300

151,000

85,300

Contribution margin 230,200 107,000 123,200 Traceable fixed expenses

141,000

65,000

76,000

Segment margin 89,200

42,000

47,200

Common fixed expense 35,000 Net operating income

$54,200

A proposal has been made that will lower variable expenses in Division L to 35% of sales. However, this reduction can only be accomplished by a $24,500 increase in Division L's traceable fixed expenses. If this proposal is implemented and if sales remain constant, overall company net operating income should:

Decrease by 24,500
increase by 29,675
decrease by 12,175
increase by 24,500

3.Pellman Inc., which produces a single product, has provided the following data for its most recent month of operations:



There were no beginning or ending inventories.

The unit product cost under absorption costing was:
91
25
72
32

4.A manufacturer of tiling grout has supplied the following data:



The company's break-even in kilograms is closest to:
464,865 kilograms
215,000 kilograms
307,765 kilograms
55,302 kilograms

5.Young Enterprises has budgeted sales in units for the next five months as follows:
June 6,400 units July 9,000 units August 7,200 units September 8,600 units October 5,600 units
Past experience has shown that the ending inventory for each month should be equal to 15% of the next month's sales in units. The inventory on May 31 fell short of this goal since it contained only 950 units. The company needs to prepare a Production Budget for the next five months.

The total number of units to be produced in July is:
9,000 units
8,730 units
10,080 units
9,270 units

6.A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations:



What is the net operating income (loss) for the month under variable costing?
13,600
$15,200
$8,000
$21,600

7.The following is last month's contribution format income statement:



What is the company's margin of safety percentage to the nearest whole percent? (Do not round intermediate calculations.)
40%
42%
17%
20%

Explanation / Answer

b

b

c

d

a

c

b

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