15.) Booble, Inc. has a contribution margin ratio of 47%. This month, sales reve

Question

15.)

Booble, Inc. has a contribution margin ratio of 47%. This month, sales revenue was $211,000, and profit was $46,300. How much are Booble's fixed costs?

$21,761

$49,585

$52,870

$99,170

16.)

Cedar Co. has forecast purchases to be $331,000 in June, $382,000 in July, $315,000 in August, and $278,000 in September. Purchases average 30% paid in cash, 70% are on credit. Credit purchases are paid 60% in the month of purchase, 30% during the month following, and 10% the second month following the purchase. Cash disbursements in September would be

$293,050

$120,700

$299,800

$88,300

17.)

Jackson Inc. produces leather handbags. The production budget for the next four months is: July 5,000 units, August 7,000 units, September 7,500 units, October 8,000 units. Each handbag requires 0.5 square meters of leather. Jackson Inc.’s leather inventory policy is 30% of next month’s production needs. On July 1 leather inventory was expected to be 750 square meters. What will leather purchases be in July?

2,300 square meters

2,700 square meters

2,550 square meters

3,575 square meters

18.)

Marlow Company produces hand tools. A production budget for the next four months is as follows: March 10,600 units, April 13,625, May 16,600, and June 21,000. Marlow Company’s ending finished goods inventory policy is 15% of the following month’s sales. Marlow plans to sell 16,600 units in May. What is budgeted ending inventory for March?

1,590

2,044

1,965

2,490

19.)

Jared Inc. produces leather handbags. The sales budget for the next four months is: July 5,300 units, August 7,300, September 7,500, October 8,800. Each handbag requires 0.5 square meters of leather. Jared Inc.’s finished goods inventory policy is 10% of next month’s sales needs. Jared Inc.’s leather inventory policy is 30% of next month’s production needs. What will leather purchases be in August? (Do not round intermediate calculations. Round your final answer to the nearest whole number.)

3,707 square meters

3,532 square meters

3,557 square meters

3,615 square meters

Booble, Inc. has a contribution margin ratio of 47%. This month, sales revenue was $211,000, and profit was $46,300. How much are Booble's fixed costs?

Explanation / Answer

(15) $52,870

Sales / Variable cost = 1 - Contribution margin ratio = 1 - 0.47 = 0.53, or 53%

Total variable cost = Sales x 53% = $211,000 x 53% = $111,830

Profit = Sales - Variable cost - Fixed costs

So, Fixed costs = Sales - Variable costs - Profit

= $(211,000 - 111,830 - 46,300) = $52,870

(16) $293,050

Note: First 2 questions are answered.

PURCHASE BUDGET SCHEDULE June July Aug Sept Total Purchase ($) 3,31,000 3,82,000 3,15,000 2,78,000 Cash Purchase: 30% ($) 99,300 1,14,600 94,500 83,400 Credit Purchase: 70% ($) 2,31,700 2,67,400 2,20,500 1,94,600 CASH COLLECTION SCHEDULE June July Aug Sept Cash Disbursed: 60% of Credit Sales of current month ($) (1) 1,39,020 1,60,440 1,32,300 1,16,760 Cash Disbursed: 30% of Credit Sales of previous month ($) (2) 69,510 80,220 66,150 Cash Disbursed: 10% of Credit Sales of 2nd previous month ($) (3) 23,170 26,740 ADD: Cash Disbursed: Cash Purchase of current month ($) (4) 99,300 1,14,600 94,500 83,400 Total Cash Disbursed ($) (1) + (2) + (3) + (4) 2,38,320 3,44,550 3,30,190 2,93,050

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