test chapter 6

test chapter 6 - The following is last month's contribution...

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The following is last month's contribution format income statement: What is the company's break-even in unit sales? 6,000 units 12,000 units 0 units 8,000 units Riven Corporation has a single product whose selling price is \$10. At an expected sales level of \$1,000,000, the company's variable expenses are \$600,000 and its fixed expenses are \$300,000. The marketing manager has recommended that the selling price be increased by 20%, with an expected decrease of only 10% in unit sales. What would be the company's net operating income if the marketing manager's recommendation is adopted? \$240,000 \$290,000 \$180,000 \$132,000 Lineman Corporation sells a product for \$230 per unit. The product's current sales are 23,400 units and its break-even sales are 20,124 units. What is the margin of safety in dollars? \$5,382,000 \$3,588,000 \$4,628,520 \$753,480 A product sells for \$20 per unit, and has a contribution margin ratio of 40%. Fixed expenses are \$120,000. How many units must be sold to yield a profit of \$30,000? 18,750 25,000 20,000 12,500 Seyal Inc.'s contribution margin ratio is 55% and its fixed monthly expenses are \$34,000. 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 \$94,000? \$60,000 \$8,300 \$51,700 \$17,700 Data concerning Grodi Corporation's single product appear below:

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Fixed expenses are \$324,000 per month. The company is currently selling 5,000 units per month. Management is considering using a new component that would increase the unit variable cost by \$9. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change? Increase of \$40,500
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This note was uploaded on 12/13/2011 for the course ACCT 201 taught by Professor Balli during the Spring '11 term at greenriver.edu.

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test chapter 6 - The following is last month's contribution...

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