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ACC 241 Exam 2 Review 40 Questions with Verified Answers,100% CORRECT
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ACC 241 Exam 2 Review 40 Questions with Verified Answers
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ACC 241 Exam 2 Review 40 Questions with Verified AnswersAll else being equal, which of the following would not cause the contribution
margin to decrease? - CORRECT ANSWER A decrease in variable costs per unit.
Given breakeven sales in units of 28,000 and a unit contribution margin of $4,
how many units must be sold to reach a target operating income of $4,000? -
CORRECT ANSWER FC @ BE = CM @ BE
FC = 28,000 x 4 = $112,000
FC + TP / CM = $112,000 + 4,000 / $4 = 29,000
Last month Kelly Company had a $30,000 loss on sales of $250,000. Fixed costs
are $60,000 a month. What sales revenue is needed for Kelly to break even? -
CORRECT ANSWER Contribution margin ratio is ($60,000 - $30,000)/$250,000 =
12%
Break-even sales is $60,000/0.12 = $500,000.
At a break-even point of 400 units sold, variable expenses were $4,000 and fixed
expenses were $2,000. What will the 401st unit sold contribute to profit? -
CORRECT ANSWER Break-even point (units) = Fixed expenses / Contribution
margin per unit
Substituting:400=$2,000 / Contribution margin per unit
Contribution margin per unit = $5
Last year, Danielle Company reported $750,000 in sales (25,000 units) and a net
operating income of $25,000. At the break-even point, the company's total
contribution margin equals $500,000. Based on this information, the company's: -
CORRECT ANSWER **Paper
, If the dollar contribution margin per unit is increased by 10%, total fixed cost is
decreased by 20%, and all other factors remain the same, net operating income
will: - CORRECT ANSWER **Paper
Spencer Corporation has a single product whose selling price is $10. At an
expected sales level of $1,000,000, the company's variable expenses are $600,000
and its fixed expenses are $300,000. The marketing manager has recommended
that the selling price be increased by 20%, with an expected decrease of only 10%
in unit sales. What would be the company's net operating income if the marketing
manager's recommendation is adopted? - CORRECT ANSWER Present sale in Units
= 100,000 ($1,000,)
Decrease in unit sale = 10%
Expected unit sales = 90,000
Expected sales = 90,000 x 12 (10 + 20%)= $1,080,000
Variable cost = 540,000 (90,000 x 6)
Expected Contribution = $540,000 (1,080,000 - 540,000)
Less Fixed cost = 300,000
Net profit = $240,000
If the contribution margin ratio is 32%, target operating income is $60,000, and
the sales revenue needed to achieve the target operating income is $400,000,
what are total fixed expenses? - CORRECT ANSWER S- VC= CM - FC = P
.32(400,000) - FC = $60,000
128,000 - FC = $60,000
128,000 - 60,000 = 68,000 FC
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