18) The Henderson Company reported sales totaling $81,000, variable costs totali
ID: 2467268 • Letter: 1
Question
18) The Henderson Company reported sales totaling $81,000, variable costs totaling $15,000, and fixed costs totaling $20,000. The contribution margin ratio (rounded to the nearest hundredth) for this company was ________.
A)
$66,000
B)
81%
C)
$24,691
D)
none of the above
20) The Donaldson Company reported income from operations of $89,000, contribution margin of $159,987, and sales totaling $235,546. The company reported variable costs of _______________
A)
$75,559.00
B)
$395,533.00
C)
$70,987.00
D)
none of the above
23) A company reports sales of $260,000, wages totaling $100,000 for production workers, and the plant manager's salary of $75,000. UPS shipping charges of $1,000. Under the absorption costing method, the gross profit is ______________.
A)
$85,000.00
B)
$160,000.00
C)
$360,000.00
D)
none of the above
26) The Henderson Company reported sales totaling $81,000, variable costs totaling $15,000, and fixed costs totaling $20,000. The break even sales (rounded to the nearest whole number) for this company was ________.
A)
$66,000
B)
81%
C)
$24,691
D)
none of the above
A)
$66,000
B)
81%
C)
$24,691
D)
none of the above
Explanation / Answer
Answer 18:
Contribution = Contribution/Sales * 100
= (81000-15000)/81000 * 100
= 81.48% or 81% (option B)
Answer 20:
Variable cost = Sales - Contribution margin
= $235546 - $159987
= $75559 (option A)
Answer 23:
Gross Profit = Sales - Production expenses
= $260000 - (100000+75000)
= $85000 (option A)
Answer 26:
Break evn sales = Fixed Cost/Contribution margin ratio
where contribution margin ratio = Contribution/sales * 100
= (81000-15000)/81000*100
= 81.48%
Breakeven sales = 20000/81.48%
= $24546 (approx.)
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