# Accounting Homework Assignment MCQs Answers

September 29, 2018

1. Jensen Company manufactures and sells a single product with a positive contribution margin. If the selling price and the variable expense per unit both increase 5% and fixed expenses do not change, what is the effect on the contribution margin per unit and the contribution margin ratio?Contributionmargin per unitContributionmargin ratioOption ANo changeNo changeOption BIncreaseIncreaseOption CIncreaseNo changeOption DIncreaseDecreaseSelect One:Option AOption DOption COption B2. Break-even analysis assumes that (choose one):· The average variable expense per unit is constant.· Total costs are constant.· The average fixed expense per unit is constant.· Variable expenses are nonlinear.3. 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 units is (choose one):· F ÷ (P-V)· Q ÷ (P-V)· V ÷ (P-V)· F ÷ [Q(P-V)]4. All other things the same, which of the following would be true of the contribution margin and variable expenses of a company with high fixed costs and low variable costs as compared to a company with low fixed costs and high variable costs? CHOOSE ONE OPTION:ContributionMarginVariableCostsOption AHigherHigherOption BLowerHigherOption CHigherLowerOption DLowerLowerFranklin Company has a margin of safety percentage of 20% based on its actual sales. The break-even point is \$200,000 and the variable expenses are 45% of sales. Given this information, the actual profit is (Choose one):· \$18,000· \$22,500· \$22,000· \$27,500——————————————————-6. A company has provided the following data:Sales3,000unitsSales price\$70per unitVariable cost\$50per unitFixed cost\$25,000If the sales volume decreases by 25%, the variable cost per unit increases by 15%, and all other factors remain the same, net operating income will (choose one):·· increase by \$20,625.·· decrease by \$31,875.·· decrease by \$3,125.·· decrease by \$15,000.Sprockets Corporation has provided the following cost data for last year when 100,000 units were produced and sold:Raw materials\$200,000Direct labor\$100,000Manufacturing overhead\$200,000Selling and administrative expense\$150,000All costs are variable except for \$100,000 of manufacturing overhead and \$100,000 of selling and administrative expense. There are no beginning or ending inventories. If the selling price is \$10 per unit, the net operating income from producing and selling 110,000 units would be (Choose One):· \$450,000· \$560,000· \$405,000· \$385,0008. Valentine Company had the following income statement for the most recent year:Sales (17,000 units)\$357,000Variable expenses\$255,000Contribution margin\$102,000Fixed expenses\$68,000Net operating income\$34,000Given this data, the unit contribution margin was (Choose One):· \$6 per unit· \$2 per unit· \$4 per unit· \$15 per unit9. Butaffuco Corporation has provided its contribution format income statement for January. The company produces and sells a single product.Sales (2,900 units)\$269,700Variable expenses\$107,300Contribution margin\$162,400Fixed expenses\$137,100Net operating income\$25,300If the company sells 3,100 units, its total contribution margin should be closest to (Choose one):· \$181,000· \$173,600· \$162,400· \$24,047————10. Greasy Inc. produces and sells a single product. The company has provided its contribution format income statement for May.Sales (4,500 units)\$427,500Variable expenses\$265,500Contribution margin\$162,000Fixed expenses\$135,300Net operating income\$26,700If the company sells 4,300 units, its net operating income should be closest to (choose one):· \$26,700· \$19,500· \$25,513· \$7,70011. The Simpson Company manufactures and sells a single product which sells for \$50 per unit and has a contribution margin ratio of 30%. The company’s monthly fixed expenses are \$25,000. If Herald desires a monthly target net operating income equal to 20% of sales dollars, sales in units will have to be (rounded) (choose one):· 1,000 units· 1,666 units· 5,000 units· 2,500 units12. Rexin Company sells a single product for \$20 per unit. If variable expenses are 60% of sales and fixed expenses total \$9,600, the break-even point will be (choose one):· \$9,600· \$14,400· \$16,000· \$24,00013.Emily, Inc. sells a product for \$10 per unit. The variable expenses are \$6 per unit, and the fixed expenses total \$35,000 per period. By how much will net operating income change if sales are expected to increase by \$40,000? (Choose one):· \$24,000 increase· \$16,000 increase· \$11,000 decrease· \$5,000 increase14. Union Corporation produces and sells a single product. Data concerning that product appear below:Per UnitPercent of SalesSelling price\$180100%Variable expenses\$9050%Contribution margin\$9050%The company is currently selling 2,000 units per month. Fixed expenses are \$131,000 per month. The marketing manager believes that an \$18,000 increase in the monthly advertising budget would result in a 170 unit increase in monthly sales. What should be the overall effect on the company’s monthly net operating income of this change? (choose one):· decrease of \$18,000· increase of \$15,300· increase of \$2,700· decrease of \$2,700————————15. Hempsen Corporation sells its product for \$12 per unit. Next year, fixed expenses are expected to be \$400,000 and variable expenses are expected to be \$8 per unit. How many units must the company sell to generate net operating income of \$80,000? (choose one):· 60,000 units· 50,000 units· 100,000 units· 120,000 units

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