Question

I understand only one question can be answered, but I will guarantee a thumbs up if you give the extra effort. I answered the first one.

The two is following this data, I believe variable cost is 1.10

Month                                    Cost                           Hours

January                               $4400                             3500

Feb                                     $8000                              7000

March                                 11000                              9500

the variable cost per unit is

A. $0.80

B. $1.07

C. $1.10

D. $2.00

The fixed cost element is:

A. $ 5.50

B. $6.55

C. $7150

D. $5600

If variable costs are 60% of sales and fixed costs are $612,000, the break even point in dollars is:

A. $367,200

B. $1,530,000

C. $244, 800

D. $1,020,000

8. Assume a company fixed costs are $25,200. Its unit sales price is $17,50, and its unit cost is $10.50. The break -even point is units is:

A. 3,600

B. 1,440

C. 3,360

D 2,400

Assume Beale Co. expects to sell 150 units next month. The unit sales price is $80, unit variable cost is $30, and the fixed costs per month are $5,000. The margin of safety is:

A.$12,000

B. $5,000

C. $4,000

D. $2,500

Quad mix co. sells the three products shown below. determine which product should be produced if there are only 1,000 machine hours available next month:

                                                      W         X       Y         z

Unit sales price                            $14       $16    $12     $8

Unit Variable cost                          9            8        6        2

Machine hours per unit                 2            4         3       2

A. W

B. X

C. Y

D. Z

The statement of cash flows is typically used to determine if a company can:

A. generate enough cash to acquire another company

B. Generate enough cash to pay cash dividends to stockholders

C. Generate enough Cash to pay an increase in employees wages

D. Generate enough cash to buy equipment

Answer 1

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Question 1
		Hours	Cost
Low		3,500	$        4,400
High		9,500	$     11,000
Difference		6,000	$        6,600
Variable Cost	$6,600/6,000 Hours		$          1.10	C
Fixed Cost	$4,400-(3,500 Hours*$1.10)		$           550	A
Question 2
	Contribution Margin Ratio	1-60%	40%
	Break even point in dollars	$612,000/40%	$1,530,000
	(Fixed cost/CM Ratio)
Question 3
	Unit Selling price		$        17.50
	Less: Unit Cost		$      -10.50
	Contribution Margin		$          7.00
	Fixed Cost		$     25,200
	Break Even point in units		3,600	A
Question 4			Per Unit	Total
	Sales Revenue		$             80	$ 12,000
	Less: Variable Cost		$            -30	$   -4,500
	Contribution Margin		$             50	$    7,500
	Less: Fixed Cost	a		$   -5,000
	Net Income			$    2,500
	CM Ratio ($50/$80)	b	62.50%
	Break Even Point	a/b		$    8,000
	Margin of Safety	$12,000-$8,000		$    4,000	C
	Budgeted Sale-BEP Sale
Question 5			W	X	Y	Z
	Unit sales price		$             14	$         16	$         12	$           8
	Unit variable cost		$              -9	$          -8	$          -6	$          -2
	Unit contribution		$               5	$           8	$           6	$           6
	Machine hours per unit		2	4	3	2
	Contribution per MH		$          2.50	$      2.00	$      2.00	$      3.00
	Contribution per MH (which is constraint) is highest for Z, Hence z should be produced.					C
Question 6
	The statement of cash flows is typically used to determine if a company can:
	A, B, C, D. All are correct