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finance question quiz




Question;Part 1;Use the following to answer questions 1-2;Donnelly Corporation;manufactures and sells T-shirts imprinted with college names and slogans. Last;year, the shirts sold for $7.50 each, and the variable expense was $2.25 per;unit.;The company needed to sell;20,000 shirts to break even. The net operating income last year was $8,400.;Donnelly's expectations for the coming year include the following;* The selling price of the;T-shirts will be $9.00.;* Variable expenses will;increase by one third.;* Fixed expenses will increase;by 10 percent.;1. The number of T-shirts Donnelly Corporation;must sell to break even in the coming year is;A) 17,500.;B) 20,000. C);22,000. D) 19,250.;2. If Donnelly Corporation wishes to earn;$22,500 in net operating income for the coming year, the company's sales volume;in dollars must be;A) $229,500.;B) $213,750. C);$257,625. D) $207,000.;7. Assume a company sells a single product. If Q;equals the level of output, P is the selling price per unit, V is the variable;expense per unit, and F is the fixed expense, then the break-even point in;sales dollars is;A) F/[(P-V)/P].;B) F/[Q(P-V)/P]. C);F/(P-V). D) F/[Q(P-V)].;18. The contribution margin ratio is 30% for the;Honeyville Company and the break-even point in sales is $150,000. If the;company's target net operating income is $60,000, sales would have to be;A) $210,000.;B) $350,000. C);$250,000. D) $200,000.;Use the following to answer questions;27-28;Jackson Company's operating;results for last year are given below;27. If the company's fixed expenses decrease by;20% next year, the break-even point will change from its previous level by;A) 150 unit increase. C) 150 unit decrease.;B) no change in the break-even point. D) 360 unit decrease.;28. If the company wants to increase its total;contribution margin by 40% over last year, it will need to increase its sales;by;A) $26,400.;B) $38,400. C);$24,960. D) $17,160.;29. Korn Company sells two products, as follows;Fixed;expenses total $300,000 annually. The expected sales mix in units is 60% for;product Y and 40% for product Z. How much is Korn's expected break-even sales;in dollars?;A) $300,000;B) $475,000;C) $544,000 D);$420,000;31. At a sales level of $190,000, Bliss Company's;gross margin is $15,000 less than its contribution margin, its net operating;income is $30,000, and its selling and administrative expense is $70,000. At this;sales level, its contribution margin would be;A) $115,000.;B) $ 85,000. C);$160,000. D) $100,000.;Part 2;Use the following to answer questions 9-11;Janos Company, which has only;one product, has provided the following data concerning its most recent month;of operations;The company produces the same;number of units every month, although the sales in units vary from month to;month. The company's variable costs per unit and total fixed costs have been;constant from month to month.;9. What is the net operating income for the;month under absorption costing?;A) $12,200;B) $8,800 C);$24,800 D) $1,700;10. What is the net operating income for the;month under variable costing?;A) $24,800;B) $1,700 C);$12,200 D);$8,800;11. What is the unit product cost for the month;under absorption costing?;A) $72 B) $89 C) $80 D) $63;18. The Jung;Corporation's production budget calls for the following number of units to be;produced each quarter for next year;Each unit;of product requires three pounds of direct material. The company's policy is to;begin each quarter with an inventory of direct materials equal to 30% of that;quarter's direct material requirements. Budgeted direct materials purchases for;the third quarter would be;A) 89,400 pounds. B);114,600 pounds. C) 29,800 pounds. D);38,200 pounds.;19. Which of the following statements is not;correct?;A) The sales budget generally is accompanied by a;computation of expected cash receipts for the forthcoming budget period.;B) The cash budget must be prepared prior to the;sales budget since managers want to know the expected cash collections on sales;made to customers in prior periods before projecting sales for the current;period.;C) The sales budget is constructed by multiplying;the expected sales in units by the sales price.;D) The sales budget is often the starting point;in preparing the master budget.;Use the following to answer questions 20-22;The Yost Company makes and sells;a single product, Product A. Each unit of Product A requires 1.2 hours of labor;at a labor rate of 8.40 per hour. Yost Company needs to prepare a Direct Labor;Budget for the second quarter.;20. The budgeted direct labor cost per unit of;Product A would be;A) $7.00.;B) $9.60. C);$10.08. D) $8.40.;21. If the budgeted;direct labor cost for May is $161,280, then the budgeted production of Product;A for May would be;A) 19,200 units. B);23,040 units. C) 16,800 units. D);16,000 units.;22. The company has budgeted to produce 20,000;units of Product A in June. The finished goods inventories on June 1 and June;30 were budgeted at 400 and 600 units, respectively. Budgeted direct labor;costs incurred in June would be;A) $201,600.;B) $207,648. C);$199,584. D) $168,000.;23. Budgeted production needs are determined by;A) adding budgeted sales in units to the;beginning inventory in units and deducting the desired ending inventory in;units from this total.;B) adding budgeted sales in units to the desired;ending inventory in units.;C) deducting the beginning inventory in units;from budgeted sales in units.;D) adding budgeted sales in units to the desired;ending inventory in units and deducting the beginning inventory in units from;this total.;28. George Company has no beginning inventory and;manufactures a single product. If the number of units produced exceeds the;number of units sold, then net operating income under the absorption method for;the year will;A) be equal to the net operating income under;variable costing less total fixed manufacturing costs.;B) be greater than the net operating income;under variable costing.;C) be equal to the net operating income under;variable costing plus total fixed manufacturing costs.;D) be equal to the net operating income under;variable costing.;Use the following to answer questions 29-31;Last year, Krepps Company;manufactured 20,000 units and sold 15,000 units. Production costs for the year;were as follows;Sales totaled $825,000 for the;year, variable selling and administrative expenses totaled $108,000, and fixed;selling and administrative expenses totaled $165,000. There was no beginning;inventory. Assume that direct labor is a variable cost.;29. Under absorption costing, the ending;inventory for the year would have a cost of;A) $180,000.;B) $248,250. C);$216,000. D) $0.;30. Under variable costing, the company's net;operating income for the year would be;A) $60,000 lower than under absorption costing.;B) $60,000 higher than under absorption costing.;C) $101,250 lower than under absorption costing.;D) $101,250 higher than under absorption costing.;31. The contribution margin per unit would be;A) $23.80.;B) $25.60. C);$19.00. D) $31.00.;32. Routsong Company had the following sales and;production data for the first four years of operation;Selling;price per unit, variable costs per unit, and total fixed costs are the same in each;year. Which of the following statements is not correct?;A) Under absorption costing, net operating income;in Year 2 would be greater than the net operating income in Year 2 under;variable costing.;B) The total net operating income for all four;years combined would be the same under variable and absorption costing.;C) Because of the changes in production levels;under variable costing the per unit inventory cost will change each year.;D) Under variable costing, net operating income;for Year 1 and Year 2 would be the same.;33. Shocker Company's sales budget shows;quarterly sales for the next year as follows;Company;policy is to have a finished goods inventory at the end of each quarter equal;to 20% of the next quarter's sales. Budgeted production for the second quarter;of the next year would be;A) 8,400 units.;B) 8,800 units. C);8,000 units. D) 7,200 units.;34. Shown below is the sales forecast for Cooper;Inc. for the first four months of the coming year.;On;average, 50% of credit sales are paid for in the month of the sale, 30% in the;month following sale, and the remainder is paid two months after the month of;the sale. Assuming there are no bad debts, the expected cash inflow in March;is;A) $122,000. B);$108,000. C) $119,000.;D) $138,000.;Use the following to answer questions;36, 37, 38, and 39;Kelly;Company is a retail sporting goods store. Facts regarding Kelly's operations;are as follows;- Sales, all on account, are budgeted at $220,000 for;November and $200,000 for December.;- Collections are expected to be 60% in the month of;sale and 40% in the month following the sale.;- The cost of goods sold is 75% of sales.;- A total of 80% of the merchandise sold in a month is;purchased in the month prior to the month of sale and 20% is purchased in the;month of sale. Payment for purchased merchandise is made in the month following;the purchase.;- Other expenses [selling and administrative] to be;paid in cash each month are $22,600.;- Monthly depreciation is $18,000.;36.;The budgeted cash;collections for November are;A) $132,000;B) $212,000 C);$208,000 D) $203,600;37.;The projected balance;in accounts payable on November 30 is;A) $204,000;B) $153,000 C);$160,000 D) $162,000;38.;The projected balance;in inventory on November 30 is;A) $150,000;B) $153,000 C);$160,000 D) $120,000;39.;The net income for;November is;A) $14,400;B) $10,000 C);$28,000 D) $32,400


Paper#45179 | Written in 18-Jul-2015

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