Question

In: Accounting

if fixed costs are $728,400, the unit selling price is $42, and the unit variable costs...

if fixed costs are $728,400, the unit selling price is $42, and the unit variable costs are $27, what is the break-even sales (units) if target profits are increased by $330,930?

A) 26,498

B) 22,062

C) 48,560

D) 70,622

if the contribution margin ratio for 4 Zsons Company is 30%, sales were $843,000 and fixed costs were $113,295, what was the income from operations?

A) 252,900

B) 139,605

C) 158,200

D) 377,650

Period Costs:

A) are expensed as costs are incurred for direct labor, direct material and factory overhead

B) appear on both the income statement and balance sheet

C) appear only on the income statement and balance sheet

D) appear only on the balance sheet

If sales are $740,000, variable costs are $466,200, and operating income is $31,500, what is the contribution margin ratio?

A) 63.0%

B) 32.7%

C) 41.3%

D)37.0%

Solutions

Expert Solution

Part 1

Fixed cost = $728,400

Selling price per unit = $42

variable costs per unit = $27

Target profit = $330,930

Contribution margin per unit = Selling price per unit - variable costs per unit

= 42 - 27

= $15

break-even sales (units) if target profits are increased by $330,930 = (Fixed cost + Target profit)/Contribution margin per unit

= (728,400 + 330,930)/15

= 1,059,300/12

= 70,620 units

Correct option is (D)

Part 2

Selling price = $843,000

Fixed cost = $113,295

Contribution margin ratio = 30%

income from operations = Sales x Contribution margin ratio - fixed cost

= 843,000 x 30% - 113,295

= 252,900 - 113,295

= $139,605

Correct option is (B)

Par 3

Period cost appear only on the income statement .

Correct option is (c)

Period cost do not appear on the balance sheet.

Part 4

Sales = $740,000

Variable cost = $466,200

Operating income = $31,500

Contribution margin = Sales - Variable cost

= 740,000 - 466,200

= $273,800

Contribution margin ratio = Contribution marginSales

= 273,800/740,000

= 37%

Correct option is (D)

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ekkarill92 answered 2 years ago
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