Accounting Exam 3

Question 1 (2 points)

 Question 1 Unsaved

 

If variable costs increase, fixed costs increase, and sales remain the same, what is expected to happen to the Contribution Margin (CM) and to the Break-even Point (BE) respectively?

Question 1 options:

 

CM: Decrease

BE: Increase

 

CM: Increase

BE: Decrease

 

CM: Decrease

BE: Decrease

 

CM: Decrease

BE: Can’t be determined

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Question 2 (3 points)

 Question 2 Unsaved

 

The break-even point is the point at which

Question 2 options:

 

fixed costs equal variable costs

 

fixed costs equal sales

 

 total contribution margin equals fixed costs

 

 sales equals variable costs

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Question 3 (3 points)

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Singer Co. reported sales of $416,000, a contribution margin of $5 per unit, fixed costs of $80,000, and a net income of $24,000. Determine the selling price per unit?

Question 3 options:

 

$26

 

$20

 

$86.70

 

$5

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Question 4 (3 points)

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Use the following information to answer questions 4 & 5 
Projected cost information for a new product is as follows:

Variable manufacturing costs:

$8 per unit

Variable selling costs:

$2 per unit

Fixed manufacturing costs:

$25,000

Fixed selling costs:

$45,000

The product is to be sold at $18 per unit.

Determine the break-even point for this product (in $)

Question 4 options:

 

$45,000

 

$126,000

 

$157,500

 

$8,750

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Question 5 (3 points)

 Question 5 Unsaved

 

Use the following information to answer questions 4 & 5 
Projected cost information for a new product is as follows:

Variable manufacturing costs:

$8 per unit

Variable selling costs:

$2 per unit

Fixed manufacturing costs:

$25,000

Fixed selling costs:

$45,000

The product is to be sold at $18 per unit.

What price would the company have to sell this product for if they wish to sell 10,000 units and realize a profit of $50,000?

Question 5 options:

 

$18

 

$22

 

$12

 

$5

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Question 6 (3 points)

 Question 6 Unsaved

 

Gastone Inc. has estimated the following forecasted sales for a 3-month period:

Month 

Estimated sales $

August 

33,000

September

29,000

October 

30,000

On average, 60% of sales are collected in the month of sale, 39% in the following month, and the remaining 1% is never collected. Determine the budgeted cash receipts for September.

Question 6 options:

 

$29,000

 

$30, 270

 

$31,110

 

$29,100

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Question 7 (3 points)

 

 

$45,000 and $10,000

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