Review of Chapter 6
1. Finnefrock Inc. produces and sells a single product. The company has provided its
contribution format income statement for December.
If the company sells 9,200 units, its net operating income should be closest to:
$95,800
2. Last year, Black Company reported sales of $640,000, a contribution margin of $160,000, and
a net loss of $40,000. Based on this information, the break-even sales point was:
$800,000
3. The break-even point in dollar sales for Rice Company is $360,000 and the company's
contribution margin ratio is 30%. If Rice Company desires a profit of $84,000, sales would have
to total:
$640,000
4. North Company sells a single product. The product has a selling price of $30 per unit and
variable expenses of 70% of sales. If the company's fixed expenses total $60,000 per year, then it
will have a break-even sales of:
$200,000
5. Fenestre Corporation's contribution margin ratio is 25%. The company's break-even is 80,000
units and the selling price of its only product is $4.00 a unit. What are the company's fixed
expenses?
$80,000
6. Jatry Corporation's budgeted sales are $300,000, its budgeted variable expenses are $210,000,
and its budgeted fixed expenses are $60,000. The company's break-even in dollar sales
is:
$200,000
7. Mardist Corporation has sales of $100,000, variable expenses of $75,000, fixed expenses of
$30,000, and a net loss of $5,000. How much would Mardist have to sell to achieve a profit of
10% of sales?
$200,000