quiz 6 solution - Question 1 Depreciation expense should...

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Question 1 Depreciation expense should always be excluded from cash disbursements in a cash budget.
Question 2 The following information relates to Kew Company's Vale Division for last year: sales .................................. $500,000 variable costs ......................... 300,000 traceable fixed costs .................. 50,000 average operating assets ............... 100,000 minimum required rate of return ........ 6% Calculate the residual income reported by Vale Division last year. $150,000 x 6%)
Question 3 The Gasson Company sells three products, Product A, Product B, and Product C. The total sales for the overall company were $1,000,000 during the month of June. During June, the company reported an overall contribution margin ratio of 37% and the total fixed costs for the entire company were $350,000. During June, Product A had sales of $500,000; Product B had sales of $300,000; and sales of Product C totaled $200,000. The traceable fixed costs for each product were: Product A, $120,000; Product B, $100,000; and Product C, $60,000. The variable costs of Product A were $300,000 and the variable costs of Product B were $180,000. Calculate the net income for the overall company for June .
Question 4 The Gasson Company sells three products, Product A, Product B, and Product C. The total sales for the overall company were $1,000,000 during the month of June. During June, the company reported an overall contribution margin ratio of 37% and the total fixed costs for the entire company were $350,000. During June, Product A had sales of $500,000; Product B had sales of $300,000; and sales of Product C totaled $200,000. The traceable fixed costs for each product were: Product A, $120,000; Product B, $100,000; and Product C, $60,000. The variable costs of Product A were $300,000 and the variable costs of Product B were $180,000. Calculate the contribution margin ratio for Product C .

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