MGTB03_Midterm_Exam_Review_Qs

# MGTB03_Midterm_Exam_Review_Qs - MGTB03 Managerial...

This preview shows pages 1–2. Sign up to view the full content.

MGTB03 Managerial Accounting – Midterm Exam Review Questions Last Name: First Name: Student Number: QUESTION 1 Saito Company manufactures basketballs. The company has a ball that sells for \$25. At present, the ball is manufactured in a small plant that relies heavily on direct labour workers. Thus, variable costs are high, totaling \$15 per ball. Last year, the company sold 30,000 of these balls, and the fixed costs were \$210,000. Required: 1. Compute (1) the CM ratio and the break-even point in balls, and (b) the degree of operating leverage at last year’s sales level. 2. Due to an increase in labour rates, the company estimates that variable costs will increase by \$3 per ball next year. If this change takes place and the selling price per ball remains constant at \$25, what will be the new CM ratio and break-even point in balls? 3. Refer to the data in (2) above. If the expected change in variable costs take place, how many balls will have to be sold next year to earn the same operating income as last year? 4.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

## This note was uploaded on 10/09/2011 for the course MANAGEMENT MGTB03H3 taught by Professor Liangchen during the Summer '09 term at University of Toronto.

### Page1 / 2

MGTB03_Midterm_Exam_Review_Qs - MGTB03 Managerial...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online