In: Accounting
16.
Assume that June’s production budget showed required production of 438,000 units, desired ending finished goods inventory of 29,000 units, and beginning finished goods inventory 12,500 units. What were June’s budgeted unit sales?
Multiple Choice
454,500 units
421,500 units
472,250 units
414,250 units
18.
Assume the following information:
Amount | Per Unit | |||||||
Sales | $ | 600,000 | $ | 40 | ||||
Contribution margin | $ | 360,000 | $ | 24 | ||||
Net operating income | $ | 240,000 | ||||||
If the selling price per unit increases by 10% and unit sales drop
by 7%, then the best of estimate of the new net operating income
is:
Multiple Choice
$240,600.
$250,600.
$260,600.
$270,600.
16.
Production = 438,000 units
Ending inventory of finished goods = 29,000 units
Beginning inventory of finished goods = 12,500 units
Sales = ?
Sales = Beginning inventory of finished goods + Production -Ending inventory of finished goods
= 12,500+438,000-29,000
= 421,500 units
June’s budgeted unit sales 421,500 units
Second option is correct.
18.
Selling price per unit increases by 10%
Selling price per unit = $40
New selling price = 40+ 40 x10%
= 40+4
= $44
Units sales drop by 7%
Units sales = Total sales/ Selling price per unit
= 600,000/40
= 15,000
New units sales = 15,000- 15,000 x 7%
= 15,000-1,050
= 13,950
Fixed cost = Contribution margin - Net operating income
= 360,000-240,000
= $120,000
Variable cost per unit = Selling price per unit - Contribution margin per unit
= 40-24
= $16
Income Statement | ||
Amout | Per unit | |
Sales (13,950 units) | 613,800 | 44 |
Variable costs (13,950 units)) | -223,200 | -16 |
Contribution margin | 390,600 | 28 |
Fixed costs | -120,000 | |
Net operating income | $270,600 |
the new net operating income is = $270,600
Fourth option is correct.
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