Joe’s Tuxedos has monthly fixed costs of $12,000

Multiple Choice Questions – QUIZ 3Select the best answer for the following questions. Each question isworth 5 points.Question 1 (5 points)Joe’s Tuxedos has monthly fixed costs of $12,000. The variable costs of sales are 60%. Whatis the break-even monthly sales revenue?Question 1 options:A)B)C)D)$20,000$30,000$19,200$7,200Question 2 (5 points)Delta Manufacturing has sales of $2,000,000 with direct materials cost of $400,000, directlabor of $280,000, variable overhead of $120,000, and fixed costs of $300,000. What isDelta’s contribution margin percentage?Question 2 options:A)B)C)D)40%55%60%45%Question 3 (5 points)If a company has a 45% contribution margin ratio and has fixed costs of $250,000, how muchsales does it need to earn a gross profit of $200,000?Question 3 options:A)B)C)D)$1,000,000$555,556$818,182$652,500Question 4 (5 points)Leisure Products management wants to ensure that each product makes a profit. Thecompany produced a hammock that sold 3,500 units at $80 per unit. The variable cost ofproduction was $36 per unit. The fixed costs were $110,000. What was the margin of safety?Question 4 options:A)B)C)D)$54,000$80,000$126,000$20,000Question 5 (5 points)Sports Specialty Inc. produces a bicycle that it normally sells wholesale for $250 per bike.The variable costs of production are $160 and the fixed cost for this product line is $154,000per month. The company has been selling this product at a rate of 2,000 units per month. Thecompany has received an order for 1,000 bikes at a price of $182 per bike. The order is to shipto a market where the company has no business, so it is believed it will not adversely affectexisting business. The company has the capacity to produce the special order. How much willoperating profit increase if Sports Specialty accepts this order?Question 5 options:A)B)C)D)increase of $26,000increase of $48,000decrease of $55,000increase of $22,000Question 6 (5 points)Premier Manufacturing makes and distributes a wall clock that is popular with schools andother institutions. Normal monthly sales are 2,500 clocks at an average sale price of $40 perclock. Production of each clock takes 15 minutes of direct labor and has material costs of $14.The direct labor rate is $22 per hour, and overhead is applied at a rate of $40 per direct laborhour. The overhead spending is 60% fixed and 40% variable costs. Premier has beenapproached by a supplier offering to supply all of the clocks at a finished cost of $25 perclock. Assume that all fixed overhead would remain, but the variable overhead would beeliminated. What would be the change in monthly operating income if Premier buys theclocks instead of making them?Question 6 options:A)B)C)D)increase of $3,750decrease of $3,750increase of $11,250decrease of $11,250Question 7 (5 points)Roscoe Enterprises has sales for a three-month period as follows: May, $240,000; June,$280,000; July, $275,000. All sales are on account, and history has shown that accountsreceivable are typically collected 10% in the month of the sale, 60% in the month after thesale, and 30% two months after the sale. What are Roscoe’s expected cash collections in themonth of July?Question 7 options:A)$267,500B)C)D)$172,000$275,000$280,000Question 8 (5 points)Mega Manufacturing has a budget to sell 100,000 units of a certain product at a selling priceof $35 per unit. Variable costs for materials, labor, and overhead are $18 per unit. Fixed cost is$800,000. Actual sales were 110,000 units, and management would like to see actualmanufacturing performance compared to a budget adjusted for volume (flexible budget).What would be the adjusted budgeted operating profit?Question 8 options:A)B)C)D)$1,870,000$900,000$1,070,000$990,000Question 9 (5 points)A company president wants the chief financial officer to tell him how many sales are requiredto make a $1,000,000 operating profit. Variable production costs are 70% of sales, and fixedcosts are $2,750,000. What are the required sales, rounded to the closest dollar?Question 9 options:A)B)C)$8,750,000$5,357,143$9,166,667D)$12,500,000Question 10 (5 points)Top Dog Company has a budget with sales of 5,000 units and $3,200,000. Variable costs arebudgeted at $1,750,000, and fixed overhead is budgeted at $900,000. What is the budgetedmanufacturing cost per unit?Question 10 options:A)B)C)D)$350$530$640$460Question 11 (5 points)Zarena was reviewing the water bill for her dog day care and spa and determined that herhighest bill, $3,800, occurred in May when she washed 400 dogs and her lowest bill, $2,400,occurred in November when she washed 200 dogs. What was the variable cost per dogassociated with Zarena’s water bill?Question 11 options:A) $6.00B) $12.00C) $9.50D) $7.00Question 12 (5 points)Phan Company sold 2,000 units in December at a price of $35 per unit. The variable cost is$20 per unit. The monthly fixed costs are $10,000. What is the operating income earned inDecember?Question 12 options:A) $30,000B) $70,000C) $20,000D) $40,000Question 13 (5 points)Vatsala sells hand-knit scarves at the flea market. Each scarf sells for $25.Vatsala pays $30 torent a vending space for one day. The variable costs are $15 per scarf. What total revenueamount does she need to earn to break even?Question 13 options:A) $85B) $75C) $50D) $100Question 14 (5 points)Brielle Company sells glass vases at a wholesale price of $2.50 per unit. The variable cost ofmanufacture is $1.75 per unit. The monthly fixed costs are $7,500. Brielle’s current sales are25,000 units per month. If Brielle wants to increase operating income by 20%, how manyadditional units, must Brielle sell? (Round your intermediate calculations to two decimalplaces)Question 14 options:A) 145,000 glass vasesB) 7,500 glass vasesC) 13,500 glass vasesD) 3,000 glass vasesQuestion 15 (5 points)Venkat Company has provided the following information regarding the two products that itsells:Jet BoatsSki BoatsSales Price per unit$8000$20000Variable Cost per unit480014000Annual fixed costs are $280,000.How many units must be sold in order for Venkat to breakeven, assumingthat Venkat sells five jet boats for every two ski boats sold?Question 15 options:A) 70 jet boats and 28 ski boatsB) 50 jet boats and 20 ski boatsC) 20 jet boats and 50 ski boatsD) 45 jet boats and 28 ski boatsQuestion 16 (5 points)White Marsh Company has prepared the following sales budget:MonthBudgeted SalesMarch$200,000April180,000May220,000June260,000Cost of goods sold is budgeted at 60% of sales and the inventory at theend of February was $36,000. Desired inventory levels at the end of eachmonth are 20% of the next month’s cost of goods sold. What is thedesired beginning inventory on June 1?Question 16 options:A) $52,000B) $26,400C) $43,200D) $31,200Question 17 (5 points)EZ Financing Inc. has prepared the operating budget for the first quarter of 2015 – Research Paper Writing Help Service. Theyforecast sales of $50,000 in January, $60,000 in February, and $70,000 in March. Variable andfixed expenses are as follows:Variable: Power cost (40% of Sales)Miscellaneous expenses: (5% of Sales)Fixed: Salary expense: $8,000 per monthRent expense: $5,000 per monthDepreciation expense: $1,200 per monthPower cost/fixed portion: $800 per monthMiscellaneous expenses/fixed portion: $1,000 per monthCalculate total selling and administrative expenses for the month ofJanuary.Question 17 options:A) $38,500B) $47,500C) $41,700D) $43,000Question 18 (5 points)Mumbai Inc. has prepared the following purchases budget:MonthBudgeted PurchasesJUNE$67,000JULY72,500AUGUST76,300SEPTEMBER73,700OCTOBER69,200All purchases are paid for as follows: 10% in the month of purchase,50% in the following month, and 40% two months after purchase.Calculate total cash payments made in October for purchases.Question 18 options:A) $72,630B) $70,680C) $70,520D) $74,290Question 19 (5 points)Mumbai Inc. has prepared the following purchases budget:MonthBudgeted PurchasesJUNE$67,000JULY72,500AUGUST76,300SEPTEMBER73,700OCTOBER69,200All purchases are paid for as follows: 10% in the month of purchase,50% in the following month, and 40% two months after purchase.Calculate balance of Accounts payable at the end of October.Question 19 options:A) $77,680B) $91,760C) $69,330D) $74,290Question 20 (5 points)The budgeted production of Fells Point Inc. is 8,000 units. Each unitrequires 40 minutes of direct labor work to complete. The direct laborrate is $100 per hour. Calculate the budgeted cost of direct labor for themonth.Question 20 options:A) $533,333.33B) $500,000.00C) $566,666.66D) $633,333.33

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