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AC202Quiz7AWOA

# AC202Quiz7AWOA - (c What dollar amount of sales would be...

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AC 202 Principles of Accounting Name Alcedo Sanchez Park University Quiz 7A-Chapter 22 Multiple Choice Questions ( 10 points Each ) Select the ONE, BEST Answer 1. A cost that changes in proportion to changes in volume of activity is a(n): A. B. C. D. E. 2. A target income refers to: 3. The excess of expected sales over the sales level at the break-even point is known as the: 4. In cost-volume-profit analysis, the unit contribution margin is:

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Problem ( 60 points ) The following information describes a product expected to be produced and sold by Hadley Company: Required: (a) Calculate the contribution margin ratio. (b) Calculate the break-even point in dollar sales.
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Unformatted text preview: (c) What dollar amount of sales would be necessary to achieve a pretax income of \$120,000? (a)Contribution Margin Ratio = (Selling Price - Variable Cost) / Selling Price Contribution Margin Ratio = (\$80 - \$32) / \$80 Contribution Margin Ratio = \$48 / \$80 Contribution Margin Ratio = 60% (b) Break-even Point in Dollar Sales = Total Fixed Costs / Contribution Margin Ratio Break-even Point in Dollar Sales = \$630,000 / 60% Break-even Point in Dollar Sales = \$1,050,000 (c) Target Sales = (Total Fixed Costs + Target Income) / Contribution Margin Ratio Target Sales = (\$630,000 + \$120,000) / 60% Target Sales = \$750,000 / 60% Target Sales = \$1,250,000 a...
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AC202Quiz7AWOA - (c What dollar amount of sales would be...

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