In: Accounting
4/ During its most recent fiscal year, Raphael Enterprises sold 240,000 electric screwdrivers at a price of $16.20 each. Fixed costs amounted to $576,000 and pretax income was $816,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year in question?
Multiple Choice
$1,920,000.
$3,072,000.
$1,392,000.
$3,888,000.
$2,496,000.
5/ During a recent fiscal year, Creek Company reported pretax income of $120,000, a contribution margin ratio of 20% and total contribution margin of $350,000. Total variable costs must have been:
Multiple Choice
$1,150,000.
$1,400,000.
$600,000.
$1,750,000.
$2,350,000
6/ Watson Company has monthly fixed costs of $81,000 and a 40% contribution margin ratio. If the company has set a target monthly income of $14,800, what dollar amount of sales must be made to produce the target income?
Multiple Choice
$239,500
$95,800
$202,500
$37,000
$165,500
4) Calculation of variable cost: | |||||
Contribution= Pretax income+ fixed costs | |||||
=816000+576000= $1392000 | |||||
Sales=240000*16.20= $3888000 | |||||
Variale cost= sales-contribution | |||||
=3888000-1392000=$2496000 | |||||
So correct answer is $2496000 | |||||
5)Calculation of variable cost: | |||||
Sales= contribution margin/ contribution margin ratio | |||||
=350000/0.20=$1750000 | |||||
Variable cost= Sales- contribution | |||||
=1750000-350000=$1400000 | |||||
So correct answer is $1400000 | |||||
6) Calculation of dollar sales: | |||||
Sales=(Fixed cost+target income)/contribution margin ratio | |||||
=(81000+14800)/0.40= $239500 | |||||
So correct answer is $239500 |