Accounting 3 Week 2 - )k Exam nmary Page I of 8 a...

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Unformatted text preview: )k Exam nmary Page I of 8 a autonfiaiioasiy cornpu‘ied _ gr exam, Gradaa for assay Date and Tlma Started: ”30 oomrnenis from your Time: Spent: a in the "Detaiis" aaotion Points Received: five, #33 ("3f Cmoaésona: fiat {Doria-13% pica 1 7 1 7 ; - All Questions KfiSWEE 1r? Expéanation: Race-Ned: ant$I 5- $§fijfi¥ i" . A company makes a singie product that it sells for $16 per unit. Fixed costs are $76,800 per month and the product has a contribution margin ratio of 40%. if the company's actual sales are 515224.000, its margin of safety is: w <9? $32,000 C) $96900 {.3 $128,000 "‘1 Ma $192,000 Margin of safety a Actual sales; — Breakeven sales Actuai sales; = $224,000 (given) Break-even saies = Fixed costs I CM ratio so $76,800 I .40 = $192§000 Margin of safety = $224,000 — $192,000 a $32,000 2 of 2 ' Escareno Corporation has provided its contribution format income statement for June. The company produces and gens a single product. $3105 ($0,400 unnia},- S?£Ed»¢&00 R’ariakio cxponawx m 44:3 2100: fimntré’iitsufion margin 0 r... . . , . i i , .. 3: CI; figfifiifi 'E‘i‘ixad 0330041005 u g , Nazi cypwrézling inn-on“: ....... If the company ssells 8,200 units, its tota; contribution margin should be closest to: <23 $301,000 29*“ {it} $311,600 (:33 $319,200 C23 $66,674 Current contribution margin I Currant sates in units = Contribution margin er unit :31 9,200 1‘ 8,400 = $38 contribution margin per unit if 8,200 unita are aoid, the: total contribution margin will be 8,200 x $38 or $31 1 ,600. >k. Exaxn Received: ents: a,{?$WFE ff 'x’eceived: :nts: ’? fivfififiri Exeianatieet M w Q _ 11;“ are; WmmmaJm-m Expiaeatien; Page 2 of 8 Zofz Decaprio inc. produces and sells a single product. The company has provided its contribution format income statement for June. Se lea: (8,.300 unite) H . .. x w . . . . -.-.. ............ $5 7234:3013 Variable exp-2: {isms « 290-400 gentrihuiien emerge: .- . . , ”w, . . , = M- 3.3 7afinfl-0 Fixed expenses . M, M , ”£11 '30:?) Net eperating ineuane ..................... :1; 2 Q01; if the company sells 9,200 units, its net operating income should be closest to: {:3 $27,077 {5.) $49,900 «:93 {1-) $36,700 {IL} $25,900 Current sales dollars I current sales in units = sales price per unit $528,000 I 8,800 = $60 safes price per unit Current variable expenses / current sales in units = variable expense per unit $290,400 / 8,800 = $33 variable expense per unit Sales (9,200 units X $60) $552,000 Variable expenses (9,200 units X $33) $303,500 Contribution margin $248,400 Fixed expenses $21 1 ,700 Net operating income $36,700 20f2 Holt Company's variable expenses are 70% of sales. At a $300,000 sales level, the degree of operating leverage is 10, If sales increase by $60,000, the degree of operating éeverage will be: {:3} 12 C:- 1 0 {if} s e {if} 4 Sales $300,000 Veriabie expenses ($300,000 x 700/0) $.21 0,000 Contribution margin $90,000 Fixed expenses ? Net operating income ? Current contribution margin / Current degree of eperating leverage — current net operating income 1 0 = $90,000 I current net eperating income Current net operating income = $9,000 k. iixarn Received: ants: ifiSB‘A/E’B?" Received: ants: "ifii’fir‘i’fii’f :eceived: rite: Contribution margin = Fixed expenses —- Net operating income $90,000 = Fixed expenses — $9,000 Fixed expenses 3 $81 ,000 Sales ($300,000 + $60,000) $360,000 Variable expenses ($360,000 x 70%) $252,000 Contribution margin $108,000 Fixed expenses $81 ,000 Net operating income $27,000 Degree of operating Eeverage = contribution margin I net operating income Degree of operating leverage = $1 08,000 / $27,000 = 4 20f2 ABC Company produces tie racks. The estimated fixed costs for the year are $288,000, and the estimated variable costs per unit are $14. ABC expects to produce and sell 60,000 units at a price of $20 per unit. How much is the break—even point in units? er {(-3} 48,000 51.7} 72,000 (it) 3,600 i: 8,471 Zofz Hart! Corporation is a single product firm with the following seiiing price and cost structure for next year: Sefling grime {met usnt-. $15 .31?) {Tents-ibutiot} rflergin ratio..-_-.-......‘...t.-......... aé-fi‘zfi 'I'otfll fixed cxpunees fer the year WM“..- 521.8,.780 How many units will Hertl have to seli next year in order to break-even? if} 1 21.500 \ <12 202,500 e (.9; 303,750 <11? 546,750 Variable cost per unit = $1.80 x (1 — 40%) Variable cost per unit =3 $1.08 Safes = variable expenses + fixed expenses + Profit $1.808 a $1.88Q + $218,700 + $0 $.72Q = $218,700 Q = $21 8,700 l .72 == 303,750 units Zof2 : Exam 31 SUV??? {C Eixpienmtéen, 2eoeived: =nts: ne'w‘er; Expienetien; Received: ants: , n ewe 'r: iEngéiengjéen; Page 4 of 8 Wenstrom Corporation produces and eelis a singie product. Data ceneerning that product appear below: Sefling pt‘fice per unit . . 5?; 301K} X’efiebie e- enema {Ber unit ........ . ........ $41 ,60 ' fixed expense per “use!!! it a... .7 ..... , ..... $1 {39x1}! (5 The break—even in monthly doiiar safes is closest to: {:2 $342,550 CT) $204,455 [If $109,616 at is"; $161,200 Sales = Variable expenses + Fixed expenses + Profit $130.00Q = $41.60Q -!- $109,615 + $0 $88.40Q m $109,616 Q m $109,616 1’ $88.40 per unit = 1,240 units 1,240 units x $130.00 selling price = $161 .200 2&2 Gayne Corporation‘s contribution margin ratio is 120/?) and its fixed monthly expenses are $84,000. If the company's sales for a month are $738,000, what is the best estimate of the company's net operating income? Assume that the fixed monthiy expenses do not change. {I} $565,440 C} $554,000 (2} $88,560 «2* GE} $4,560 Sales $738,000 Variabie expenses ($738,000 x 880/0) $649,440 Contribution margin $88,560 Fixed expenses $84,000 Net operating income $4,580 Zof‘éA Jiik inofs contribution margin ratio is 589/5 and its fixed monthly expenses are $363,000, Assuming that the fixed monthiy expenses do not Change, what is the best estimate of the company's net operating income in a month when sales are $103,000? «at £933 $23,740 iv: $59,740 621:} $67,000 a”) $7,260 Saiee $1 03,000 Variable expenses {$103,000 x 42%) $43,250 Contribution marg§n ($103,000 x 5895) $59,740 Fixed expeneee $36,000 Net operating income $23,740 ; Exam Received: mts: FESVJE‘EE’. Qeceived: :nts: 5."? S’séfiéfi 2”: Exeiafleiiofl: Received: ants: {in fi‘éfEEIL “'ngréerleiiorz: Received: ants: page 5 of 8 20f2 Rambles Toyland makes a product that sells for $70 per unit and has $45 per unit in variable costs. Annual fixed costs are $24,000. How many units must be sold to earn a profit of $12,000? Wimpy Inc. produces and sells a single product. The seliing price of the product is $1 550.00 per unit and its variable cost is $58.50 per unit. The fixed expense is $386,915 per month. The breakweven in monthly dollar sales is closest to: {12} $601,500 {:3 $366,915 (.13 $836,408 Cf: $940,808 Sales = variable expenses + fixed expenses + profit $150.00Q = $58.50Q + $368,915 + $0 $91.50Q = $366,531 5 Q 2 $366,915 / $91.50 per unit = 4,010 units 4,010 units x $150.00 selling price = $601,500 20f2 Logsdon Corporation produces and sells a single product whose contribution margin ratio is 6396. The company‘s monthly fixed expense is $720,720 and the company's monthly target profit is $28,000. The dollar sales to attain that target profit is closest to: <3} $471,594 (.31 $454,054 {$4 $1,188,444 :1? $1,144,000 (Fixed expenses + Target profit)! CM ratio ($720,720 A» $28,000) I .83 a $1,188,444 (rounded) Zofz $hun Corporation manufactures and seiis a hand held calculator. The following information negates to Shaun‘s operations for last year: k Exam Page 6 of 8 Unit profits-ct cost mutter variflbie meeting: ..... -_-. $5.2.“ per unit Pie. “(:1 311 anuffletufing (riverboat?! oust for flue year ,,,,,,,,,,,,,, $2fifif§i3fi Fixed Sefiifig anti aciininistrafive core: for the year ........... $3 flt'lfiffiifi {I flit 2-; ( on i a: Life tee-r225} prmrziuced art-Li m} R“! ............... _ ............. 4313., (“3%) What ie Shun‘s unit product cost under absorption costing for test year? .r’sew'er. .1::7 $4_ 1 Q i) e455 $5.85 L} $6430 Exoiarsetéoe': Unit fixed manufacturing overhead = Fixed manufacturing overhead / units produced = $280,000 1 400,000 = $.65 per unit Unit product cost 2 $5.20 + $5.65: $5.85 Qeceived: 2 of 2 H113: A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: [initia- if: beginning inventory“.....H..x.,....,-2- {“5 (Knits, predate-€213 .i-.;,2_2 Liflfi} {Inite 3:132:21 -- - 3-17636 Lisa-its; in ending inventory ............................ 20f} R7213”.ie‘ble 6955;: 2:. per unit: ifireet material-s . . .. ......................... Ejireet Eaher .. . . .. .. ‘833175 3131:: menuieunu‘i nag; over-head . 2 . 2 2.. . “V ari 2:11:33 e 23%;] in g Eifiii fidrffli mi strafiv e ......... i r .A' WW ’1 92 DJ in QiJhJW AF’ tried zoo-ate: Fixed. manufaeturiflg overhead. “n“..mn.“ $‘?2,2€¥{) E: fraud selling anti :ufininietrtflix’u ............. Sififit’ifl What is the unit product cost for the month under abaorption costing? (“FEEWESL $67 ' $105 ' $1 1 1 <3 $73 taereeeon-n: Unit fixed manufacturing overhead = $72,200 I 1 7900 m 338 Unit product cost = DM + DL + Variabie MD + Fixed M0 $33 + $32 + $2 + $38 : $105 Received; 2 of 2 11113: k .iixarn Expiene‘fioe: Qeceived: ants: Page 7 0f 8 A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Limits in beginning inx‘reniorym...“_-_.,........._ (“I {Emits prnfiufied E.--.-- 7,} {if} Lfflite eoid ....................................... - “itififi {finite in ending inven for}: ........................... 1 EH? Efflriahie posts, per unit: E)i?§€5t mE-R'Eez‘izfis ............... ..... $33 .E.)§fc¢t EaE‘yef E- $33: ‘9 :11 5313335 xnauulacinflng 4:353:33 hezKL...E.E.._E 31 X- ariahie: seiiing and ddiflifile‘erEtEV“ ......--. 3'? Fixod uofifa: Fixed rnanuihoimring overhead WEE... 3E ?fi,4f3fl Fixed eeiliéng and 3min:inieh‘afiixw; $7,961”? What is the unit product cost for the month under variable costing? IE.) $87 20f2 product cost = DM + DL + Variable MO: $33 + $53 + $1 = $87 A manufacturing company that produces a single product has provided the following data concerning its most recent month of operations: Selling price -EEEEEE Si 333 If'nits in begiru‘aimg inventory.HEN.-.,.....EE..... (‘3 E..'"'i':it3;= pt“<:u;it.1<:e<fE.. 694%.“? 3.311313; flask} EEEEE_E-<.E f3- 2'31)“ Effiiie in onfléfig; ifivenh‘n‘y ...................... . ....... 2i)“ Vorieble 4103213 per unit: Eiirwt Hiatefiu‘fifi - 554‘} Ffzir'eet ifihmr .E . . .. . $3 8 K ésrinhle Inunufrmfinnfle on, cmhea-g}..E-...EE..E<E 553 \*'tzri.:ah}¢ eefiing zinéi fidifiinisirazitc ...... . ...... <17}, 1 E: 53’ ed ooeb-i; Fixerfi waanufzmturnms on» <3: ham-16% ................... :59; 33 {38.81339 E'i‘xeéi golfing atrrd i!(‘1¥‘§11§3i§1.£ 3;in ............. $74E4EE€5§| vk Exam: Page 8 of 8 The tetal contribution margin for the month under the variable costing approach is: {1:2 $155,009 £1) $250400 a»? '19) $192,200 {Ti $83400 * Expéerzaiéofi. Sales revenue ($1 35 x 6,200) = $837,000 Variable cost: Direct materials ($49 x 6,209) = $303,800 Direct {abof' ($38 x 6,200) = $235,800 Variable manufacturing overhead ($6 x 6.200) = $37,200 Variable seiiing and admin expense ($1 1 x 6,200) = $68,200 Total variable costs w $644,800 Contribution margin = $192,200 k :2 m 5; E: W Received: 2 70f 2 ants: Beamish lnc.., which produces a single product, has provided the following data for its most recent month of operations: Numimr (31' units, pred‘ueesfi“..........H..Hum“,“hwy...“ Emmi-arable etc-22:13 per unit Ijireei materials; .................... . ............... {iii—wet {ab-Var ,-_- T.._,T.-.....-.N.....-, Vrar‘ié‘xl-‘flc: Inanufeciuring nverheaci,.,,,.......,i,,-.v....r \feriahie se-lfing and acfiuxinista‘atéve ex:‘)ense-,....,- Fixed cents-“r: Fixed maxtuflieturimg ever-head ...................... , ..... Tiered gelling zine? eihninisiraiive £33363:an ........... 3,0210 $3? 355$ fifi gr #4 in 333 E Egan” 53443.9()(3 There were no beginning or ending inventories. The unit product cast under absorption costing wee: {:3} $97 «1% a?) $136 <1”) $194 axgsenmmn; Unit fixed manufacturing overhead = $312,000 / 8.000 = $39 Unit product cost 3 $37 + $56 + $4 + $39 = $136 .fiSSV‘w-‘QF: (“‘5 $93 Qeceived: 2 of 2 ants: Epiayed in (S%§T»GT:QG) Mouniain “{iH’XG (U53 8. Canada) ...
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