Dakota Company provides the following information about its single product: Targeted operating income........................$40,000 Selling price per unit......................................$3.50
Question:
Dakota Company provides the following information about its single product:
Targeted operating income........................$40,000
Selling price per unit......................................$3.50
Variable cost per unit.....................................$1.05
Total fixed costs.........................................$90,000
What is the contribution margin ratio?
A) 0.70
B) 0.44
C) 0.56
D) 0.30
America First Company provided the following manufacturing costs for the month of June.
Direct materials cost..................................................................$40,000
Janitor's salary.............................................................................$2,500
Property taxes.............................................................................$8,000
Direct labor cost........................................................................$68,000
Packaging costs..........................................................................$9,400
Equipment depreciation (straight-line)......................................$12,000
Factory insurance.......................................................................$9,500
Factory manager's salary...........................................................$6,400
How much of the above would normally be considered fixed costs?
A) $47,800
B) $26,400
C) $35,800
D) $38,400Direct materials cost......................................................$40,000
Janitor's salary.................................................................$2,500
Property taxes.................................................................$8,000
Direct labor cost............................................................$68,000
Packaging costs..............................................................$9,400
Equipment depreciation (straight-line)..........................$12,000
Factory insurance...........................................................$9,500
Factory manager's salary................................................$6,400
How much of the above would normally be considered variable costs?
A) $108,000
B) $125,400
C) $117,400
D) $38,400
Jurassic Manufacturers produces flooring material. Fixed costs are $5,000 per month. Sales price for one unit of product is $50, and the variable cost per unit is $30. If Jurassic wishes to earn an operating income of $2,000, how many units need to be sold?
A) 270
B) 300
C) 320
D) 350
Jurassic Manufacturers produces flooring material. Fixed costs are $5,000 per month. Sales price for one unit of product is $50, and the variable cost per unit is $30. If Jurassic wishes to earn an operating income of $5,000, how many units need to be sold?
A) 500
B) 300
C) 450
D) 350
Bell Products manufactures packs of pesticides which are sold to farmers. Cost, volume and price data are as follows:
Price per unit………………………………$25.00
Variable cost per unit……………………...$20.00
Fixed cost per month……………………...$8,000
Current sales volume (units)………………..3,000
If Bell wishes to increase their current operating income by 10%, what volume of sales is needed?
A) 3,140
B) 3,200
C) 3,500
D) 3,625
Bell Products manufactures packs of pesticides which are sold to farmers. Cost, volume and price data are as follows:
Price per unit…………………………………..$25.00
Variable cost per unit………………………….$20.00
Fixed cost per month………………………….$8,000
Current sales volume (units)……………………3,000
If Bell wishes to double their current operating income, what volume of sales is needed?
A) 3,140
B) 4,400
C) 3,500
D) 3,625
Juan Martinez played classical guitar professionally until his motorcycle accident left him disabled. After long months of therapy, he hired an experienced luthier (maker of stringed instruments) and opened a small shop that makes and sells Spanish guitars. The guitars sell for $600, and the fixed monthly operating costs are as follows:
Rent and utilities....................................................$960
Wages and benefits of luthier.............................$1,500
Other.....................................................................$900
Juan got confused when his accountant told him about contribution margin ratios, but he understood clearly that for every dollar of sales, $0.70 went to cover his fixed costs, and that anything past that point was pure profit.
How many guitars does Juan have to sell each month to break even?
A) 6
B) 5
C) 12
D) 8
Juan Martinez played classical guitar professionally until his motorcycle accident left him disabled. After long months of therapy, he hired an experienced luthier (maker of stringed instruments) and opened a small shop that makes and sells Spanish guitars. The guitars sell for $600, and the fixed monthly operating costs are as follows:
Juan Martinez played classical guitar professionally until his motorcycle accident left him disabled. After long months of therapy, he hired an experienced luthier (maker of stringed instruments) and opened a small shop that makes and sells Spanish guitars. The guitars sell for $600, and the fixed monthly operating costs are as follows:
Rent and utilities……………………….$960
Wages and benefits of luthier………..$1,500
Other…………………………………...$900
Juan got confused when his accountant told him about contribution margin ratios, but he understood clearly that for every dollar of sales, $0.70 went to cover his fixed costs, and that anything past that point was pure profit.
How many dollars of revenue does Juan have to make each month to break even?
A) $3,950
B) $4,800
C) $3,360
D) $5,200
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