SE_Ch04 - SAMPLE EXAM: CHAPTER 4 *SEE SOLUTION ON THE LAST...

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SAMPLE EXAM: CHAPTER 4 ***SEE SOLUTION ON THE LAST PAGE*** 1. Escareno Corporation has provided its contribution format income statement for June. The company produces and sells a single product. Sales (8,400 units). ........................ $764,400 Variable expenses. ......................... 445,200 Contribution margin. ....................... 319,200 Fixed expenses. ............................. 250,900 Net operating income. .................... $ 68,300 If the company sells 8,200 units, its total contribution margin should be closest to: a. $301,000 b. $311,600 c. $319,200 d. $ 66,674 2. Conrad’s Ornamental Concrete manufactures ornamental concrete blocks. Each unit requires variable production costs of $20.00 per unit and variable selling costs are $5.00 per unit. Fixed overhead is expected to be $150,000 and fixed administrative expenses are expected to be $50,000. Each unit will sell for $50. Compute the sales in dollars necessary to earn income of $100,000 (before tax). a. $750,000 b. $600,000 c. $333,333 d. $250,000 e. $ 8,000 3. Dice Company has a budget that reports the following: Revenue ($20/unit) $200,000 Variable Costs 150,000 Contribution Margin $ 50,000 Fixed Costs 30,000 Expected Profit $ 20,000 At what level of sales (in dollars) does Dice Company expect to breakeven? a. $180,000 b. $135,000 c. $120,000 d. $ 80,000 e. cannot be determined based on information provided.
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This note was uploaded on 11/22/2011 for the course ACCT 230 taught by Professor Allen during the Fall '08 term at Texas A&M.

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SE_Ch04 - SAMPLE EXAM: CHAPTER 4 *SEE SOLUTION ON THE LAST...

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