Managerial Accounting Homework Assignment MCQs

| December 3, 2017

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?

Contribution
margin per unit

Contribution
margin ratio

Option A

No change

No change

Option B

Increase

Increase

Option C

Increase

No change

Option D

Increase

Decrease

­­
Select One:

Option A

Option D

Option C

Option B

2. 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:

Contribution
Margin

Variable
Costs

Option A

Higher

Higher

Option B

Lower

Higher

Option C

Higher

Lower

Option D

Lower

Lower

Franklin 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:

Sales

3,000

units

Sales price

$70

per unit

Variable cost

$50

per unit

Fixed cost

$25,000

If 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

$200,000

Direct labor

$100,000

Manufacturing overhead

$200,000

Selling and administrative expense

$150,000

All 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

·
$385,000

8. Valentine Company had the following income statement for the
most recent year:

Sales (17,000 units)

$357,000

Variable expenses

$255,000

Contribution margin

$102,000

Fixed expenses

$68,000

Net operating income

$34,000

Given this data, the unit
contribution margin was (Choose One):

·
$6 per
unit

·
$2 per
unit

·
$4 per
unit

·
$15 per
unit

9. Butaffuco Corporation has provided its contribution format
income statement for January. The company produces and sells a single product.

Sales (2,900 units)

$269,700

Variable expenses

$107,300

Contribution margin

$162,400

Fixed expenses

$137,100

Net operating income

$25,300

If 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)

$427,500

Variable expenses

$265,500

Contribution margin

$162,000

Fixed expenses

$135,300

Net operating income

$26,700

If the company sells 4,300
units, its net operating income should be closest to (choose one):

·
$26,700

·
$19,500

·
$25,513

·
$7,700

11. 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
units

12. 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

·
$24,000

13.

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
increase

14. Union Corporation produces and sells a single product. Data
concerning that product appear below:

Per Unit

Percent
of Sales

Selling price

$180

100%

Variable expenses

$90

50%

Contribution
margin

$90

50%

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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