Black Companys sales are 600000 its fixed expenses are 150000 and its variable

Black companys sales are 600000 its fixed expenses

This preview shows page 5 - 7 out of 37 pages.

38. Black Company’s sales are $600,000, its fixed expenses are $150,000, and its variable expenses are 60% of sales. Based on this information, the margin of safety is:A) $90,000B) $190,000C) $225,000D) $240,00039. Variable expenses for Alpha Company are 40% of sales. What are sales at the break-even point,assuming that fixed expenses total $150,000 per year:40. Minist Company sells a single product at a selling price of $15.00 per unit. Last year, the company’s sales revenue was $225,000 and its net operating income was $18,000. If fixed expenses totaled $72,000 for the year, the break-even point in unit sales was41. Winger Corp. sells a product for $5 per unit. The fixed expenses are $210,000 and the unit variable expenses are 60% of the selling price. What sales would be necessary in order for WingerCorp. to realize a profit of 10% of sales?42. Sales in East Company declined from $100,000 per year to $80,000 per year, while net operating income declined by 300 percent. Given these data, the company must have had an operating leverage of:A) 15B) 2.7C) 30D) 12
Background image
43. Darth Company sells three products. Sales and contribution margin ratios for the three products follow: Given these data, the contribution margin ratio for the company as a whole would be: 44. Sunnripe Company manufactures and sells two types of beach towels, standard and deluxe. Sunnripe expects the following operating results next year for each type of towel:Sunnripe expects to have a total of $57,600 in fixed expenses next year. What is Sunnripe’s break-even point next year in sales dollars?45. Cindy, Inc. sells a product for $10 per unit. The variable expenses are $6 per unit, and the fixed expenses total $35,000 per period. By how much will net operating income change if sales are expected to increase by $40,000?46. Birney Company has prepared the following budget data:An advertising agency claims that an aggressive advertising campaign would enable the company to increase its unit sales by 20%. What is the maximum amount that the company can pay for advertising and obtain a net operating income of $200,000?A) $100,000B) $200,000C) $300,000D) $550,00047. During last year, Thor Lab supplied hospitals with a comprehensive diagnostic kit for $120. At a volume of 80,000 kits, Thor had fixed expenses of $1,000,000 and net operating income of $200,000. Because of an adverse legal decision, Thor’s liability insurance expenses this year will be $1,200,000 more than they were last year. Assuming that the volume and other costs are unchanged, what should be the sales price this year if Thor is to make the same $200,000 net operating income?Brewer, Introduction to Managerial Accounting, 3/e28
Background image
Image of page 7

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture