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Chapter 06 Quiz - A

# Smith company sells a single product at a selling

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5. Smith Company sells a single product at a selling price of \$30 per unit. Variable expenses are \$12 per unit and fixed expenses are \$41,400. Smith's break-even point is: A) 1,380 units. B) 2,300 units. C) 3,450 units. D) 6,900 units. 6. The following information pertains to Sisk Co.: Sales (25,000 units) ......................... \$500,000 Manufacturing expenses: Variable ...................................................... 170,000 Fixed ...................................................... 35,000 Selling and general expenses: Variable ...................................................... 5,000 Fixed ...................................................... 30,000 Sisk's break-even point in number of units is: 7. Rider Company sells a single product. The product has a selling price of \$40 per unit and variable expenses of \$15 per unit. The company's fixed expenses total \$30,000 per year. The company's break-even point in terms of total dollar sales is: 8. The following information pertains to Clove Co.: Budgeted sales ................................. \$1,000,00 0 Breakeven sales ............................... 700,000 Budgeted contribution margin ......... 600,000

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Clove's margin of safety is: Use the following to answer questions 9-10: An income statement for Sam's Bookstore (a merchandiser) for the first quarter of the year is presented below: Sam's Bookstore Income Statement For Quarter Ended March 31 Sales ...................................... \$900,000 Cost of goods sold ................ 630,00 0 Gross margin ......................... 270,000 Less operating expenses: Selling ........................................... \$100,00 0 Administration ........................................... 104,00 0 204,00 0 Net operating income ............ \$ 66,000 On average, a book sells for \$50. Variable selling expenses are \$5 per book with the remaining selling expenses being fixed. The variable administrative expenses are 4% of sales with the remainder being fixed. 9. The contribution margin for Sam's Bookstore for the first quarter is: A) \$180,000. B) \$774,000. C) \$144,000. D) \$756,000. 10. The net operating income using the contribution approach for the first quarter is:
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