Scott quit a $30,000-a-year job with a local heating and air conditioning firm to go into business for himself. After his first year in business, his accountant showed him an income statement, which indicated Scott’s firm had a profit of $40,000. During this year Scott had drawn a salary of $20,000.

Scott's accounting profit is ___________.

Answer

1.92308 points

Question 2

Scott quit a $30,000-a-year job with a local heating and air conditioning firm to go into business for himself. After his first year in business, his accountant showed him an income statement, which indicated Scott’s firm had a profit of $40,000. During this year Scott had drawn a salary of $20,000.

Scott's entrepreneurial profit is ________________ .

Answer

1.92308 points

Question 3

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.

The monthly fixed expenses are _______________.

Answer

1.92308 points

Question 4

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.

The contribution margin for each doll is ___________ .

Answer

1.92308 points

Question 5

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.

The number of dolls that must be sold each month in order to break even is ___________. (Round your answer to a whole number because you can't sell part of a doll.)

Answer

1.92308 points

Question 6

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.

The dollars in sales that the firm needs to break even is ____________ . (Round your answer to the nearest whole dollar.)

Answer

1.92308 points

Question 7

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.

The firm's goal is to make $100,000 profit per month. The number of dolls that must be sold to achieve that goal is _____________. (Round your answer to a whole number.)

Answer

1.92308 points

Question 8

James builds brick walls for custom homes. His annual sales are $300,000, and his net income is $18,000. He has assets of $100,000 invested in this business.

The net profit margin for James is ____________.

Answer

1.92308 points

Question 9

James builds brick walls for custom homes. His annual sales are $300,000, and his net income is $18,000. He has assets of $100,000 invested in this business.

The asset turnover for James is ___________ .

Answer

1.92308 points

Question 10

James builds brick walls for custom homes. His annual sales are $300,000, and his net income is $18,000. He has assets of $100,000 invested in this business.

The return on investment for James is _____________ .

Answer

1.92308 points

Question 11

Use the Income Statement for Ultimate Image Corporation (shown below) to answer questions 11 through 13.

Ultimate Image Corporation

Income Statement

Fiscal Year Ended:

Dec. 31, 2011

Dec. 31, 2010

Total revenue

1,789,654

703,904

Cost of goods sold

478,963

275,963

Gross profit

1,310,691

427,941

Operating expenses

65,987

57,896

Operating income

1,244,704

370,045

Interest and taxes

544,444

289,635

Net Income

700,260

80,410

Earnings per Share

$14.01

$1.61

(50,000 shares outstanding)

The degree of operating leverage (DOL) is _______________ .

Answer

1.92308 points

Question 12

The degree of financial leverage (DFL) is _____________ . (Use the Income Statement for Ultimate Image Corp. found in question 7 to calculate your answer.)

Answer

1.92308 points

Question 13

The degree of combined leverage (DCL) is _____________ . (Use the Income Statement for Ultimate Image Corp. found in question 7 to calculate your answer.)

Answer

1.92308 points

Scott's accounting profit is ___________.

Answer

1.92308 points

Question 2

Scott quit a $30,000-a-year job with a local heating and air conditioning firm to go into business for himself. After his first year in business, his accountant showed him an income statement, which indicated Scott’s firm had a profit of $40,000. During this year Scott had drawn a salary of $20,000.

Scott's entrepreneurial profit is ________________ .

Answer

1.92308 points

Question 3

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.

The monthly fixed expenses are _______________.

Answer

1.92308 points

Question 4

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.

The contribution margin for each doll is ___________ .

Answer

1.92308 points

Question 5

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.

The number of dolls that must be sold each month in order to break even is ___________. (Round your answer to a whole number because you can't sell part of a doll.)

Answer

1.92308 points

Question 6

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.

The dollars in sales that the firm needs to break even is ____________ . (Round your answer to the nearest whole dollar.)

Answer

1.92308 points

Question 7

Sarah’s Toy Factory manufactures dolls and has the following information: The average doll has a sales price of $18; raw materials for the doll are $4; production labor costs $8 per hour and it takes 30 minutes to assemble one doll. Operating expenses are as follows: salaries, $10,000 per month; insurance, $1,200 per quarter; rent, $3,000 per month; and utilities, $1,000 per month.

The firm's goal is to make $100,000 profit per month. The number of dolls that must be sold to achieve that goal is _____________. (Round your answer to a whole number.)

Answer

1.92308 points

Question 8

James builds brick walls for custom homes. His annual sales are $300,000, and his net income is $18,000. He has assets of $100,000 invested in this business.

The net profit margin for James is ____________.

Answer

1.92308 points

Question 9

James builds brick walls for custom homes. His annual sales are $300,000, and his net income is $18,000. He has assets of $100,000 invested in this business.

The asset turnover for James is ___________ .

Answer

1.92308 points

Question 10

James builds brick walls for custom homes. His annual sales are $300,000, and his net income is $18,000. He has assets of $100,000 invested in this business.

The return on investment for James is _____________ .

Answer

1.92308 points

Question 11

Use the Income Statement for Ultimate Image Corporation (shown below) to answer questions 11 through 13.

Ultimate Image Corporation

Income Statement

Fiscal Year Ended:

Dec. 31, 2011

Dec. 31, 2010

Total revenue

1,789,654

703,904

Cost of goods sold

478,963

275,963

Gross profit

1,310,691

427,941

Operating expenses

65,987

57,896

Operating income

1,244,704

370,045

Interest and taxes

544,444

289,635

Net Income

700,260

80,410

Earnings per Share

$14.01

$1.61

(50,000 shares outstanding)

The degree of operating leverage (DOL) is _______________ .

Answer

1.92308 points

Question 12

The degree of financial leverage (DFL) is _____________ . (Use the Income Statement for Ultimate Image Corp. found in question 7 to calculate your answer.)

Answer

1.92308 points

Question 13

The degree of combined leverage (DCL) is _____________ . (Use the Income Statement for Ultimate Image Corp. found in question 7 to calculate your answer.)

Answer

1.92308 points

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