BA213_Review.test2

BA213_Review.test2 - BA213 Review for test # 2 Instructor:...

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BA213 Review for test # 2 – Instructor: Usha Ramanujam 1. Contribution margin can be defined as: A. the amount of sales revenue necessary to cover variable expenses. B. sales revenue minus fixed expenses. C. the amount of sales revenue necessary to cover fixed and variable expenses. D. sales revenue minus variable expenses. 2. If both the fixed and variable expenses associated with a product decrease, what will be the effect on the contribution margin ratio and the break-even point, respectively? A. B. C. D. 3. The margin of safety can be calculated by: A. Sales - (Fixed expenses/Contribution margin ratio). B. Sales - (Fixed expenses/Variable expense per unit). C. Sales - (Fixed expenses + Variable expenses). D. Sales - Net operating income. 1
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4. Sorin Inc., a company that produces and sells a single product, has provided its contribution format income statement for January. If the company sells 4,600 units, its total contribution margin should be closest to: A. $54,600 B. $59,800 C. $69,400 D. $13,362 5. Decaprio Inc. produces and sells a single product. The company has provided its contribution format income statement for June. If the company sells 9,200 units, its net operating income should be closest to: A. $27,077 B. $49,900 C. $36,700 D. $25,900 6. Jilk Inc.'s contribution margin ratio is 58% and its fixed monthly expenses are $36,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are $103,000? A. $23,740 B. $59,740 C. $67,000 D. $7,260 2
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7. Data concerning Kardas Corporation's single product appear below: The company is currently selling 8,000 units per month. Fixed expenses are $719,000 per month. The marketing manager believes that a $20,000 increase in the monthly advertising budget would result in a 180 unit increase in monthly sales. What should be the overall effect on the company's monthly net operating income of this change? A. decrease of $160 B. increase of $20,160 C. decrease of $20,000 D. increase of $160 8. Hartl Corporation is a single product firm with the following selling price and cost structure for next year: How many units will Hartl have to sell next year in order to break-even? A. 121,500 B. 202,500 C. 303,750 D. 546,750 3
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9. Data concerning Buchenau Corporation's single product appear below: The break-even in monthly unit sales is closest to: A. 3,111 B. 6,892 C. 4,040 D. 13,525 10. Data concerning Follick Corporation's single product appear below: The break-even in monthly dollar sales is closest to: A. $1,148,400 B. $638,851 C. $321,552 D. $446,600 11. Caneer Corporation produces and sells a single product. Data concerning that product appear below: The unit sales to attain the company's monthly target profit of $44,000 is closest to: A. 7,896 B. 12,769 C. 6,578 D. 4,341 4
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12. Ensley Corporation has provided the following data concerning its only product: The margin of safety as a percentage of sales is closest to: A. 61%
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This note was uploaded on 07/01/2011 for the course ACCT 2302 taught by Professor Smith,s during the Spring '09 term at HCCS.

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BA213_Review.test2 - BA213 Review for test # 2 Instructor:...

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