All Samples 081

All Samples 081 - Once again I am providing some sample...

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Once again, I am providing some sample questions (like quiz questions) that have appeared on prior exams in accounting 210). I am providing these to stimulate your interest in preparing well for exam 3. Please work these questions on your own to determine your level of preparation for exam 3. If you wait for the solutions, you will be deluding yourself in thinking that you are truly ‘prepared’ to do the best possible job Tuesday 4/8/08. I will allow discussion concerning these questions on BB. But do not simply post the answers. Others may consider your answers to be correct when in fact they may not be correct. I will discuss suggested solutions in class this week before the exam Questions 1 and 2 relate to the following data : Williams Co. has three operating departments, Zippers, Belts and Buttons. The operating income statement for the month of September showed the following results: Zippers Belts Buttons TOTAL Sales $ 50,000 $ 60,000 $ 40,000 $ 150,000 Variable Costs 25,000 15,000 12,000 52,000 Contribution Margin 25,000 45,000 28,000 98,000 Fixed Costs - Traceable 5,000 10,000 6,000 21,000 - Common 7,000 12,000 28,000 47,000 NET INCOME $13,000 $ 23,000 ($ 6,000) $ 30, 000 1. Williams is considering several plans that will restructure the sales mix. One plan, PLAN A will eliminate the Buttons department altogether. What will be the effect on total net income if she decides to carry out the plan? (Assume that there is no alternative use of the selling space presently occupied by that department.) 2. An alternative to PLAN A , (PLAN B) calls for the elimination of the Buttons department with a proportional expansion of the Zippers and Belts departments into the vacated space. If the sales of both Zippers and Belts increase by 40% after the expansion and reorganization, what will be the effect on the total net income?
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3. A segment of a business responsible for only revenues and expenses would be called a center: a. cost b. investment c. margin d. residual interest e. profit
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All Samples 081 - Once again I am providing some sample...

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