41.Hinge Manufacturing’s cost of goods sold is $420,000 variable and $240,000 fixed. Thecompany’s selling and administrative expenses are $300,000 variable and $360,000 fixed.If the company’s sales is $1,480,000, what is its net income? a.$160,000b.$760,000c.$820,000d.$880,000Ans: a, LO: 1, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC:Problem Solving/Decision Making, IMA: ReportingSolution: $1,480,000 $420,000 $240,000 $300,000 $360,000 $160,000 42.Woolford’s CVP income statement included sales of 4,000 units, a selling price of $50,variable expenses of $30 per unit, and net income of $25,000. Fixed expenses are 43.The contribution margin ratio is 44.For Pierce Company, sales is $500,000, variable expenses are $330,000, and fixedexpenses are $140,000. Pierce’s contribution margin ratio is 34% 45.For Sanborn Co., sales is $1,000,000, fixed expenses are $300,000, and the contributionmargin per unit is $48. What is the break-even point? a.$2,083,334 sales dollarsb.$625,000 sales dollarsc.20,834 unitsd.6,250 unitsAns: d, LO: 2, Bloom: AP, Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry/Sector Perspective, AICPA FN: Measurement, AICPA PC:Problem Solving/Decision Making, IMA: Business EconomicsSolution: $300,000 / $48 6,250 FOR INSTRUCTOR USE ONLY 19 - 9
Test Bank for Accounting, Tools for Business Decision Making Fifth Edition 46.For Franklin, Inc., sales is $1,500,000, fixed expenses are $450,000, and the contributionmargin ratio is 36%. What is net income?
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