This set of 28 questions, taken from prior examinations, covers topics

in Chapters 6, 7, and 9.

The purpose of sample multiple choice questions is to acquaint you

with the style and substance of typical exam questions on this

material.

Please be aware that:

methods to increase your understanding of the topics covered in the

course.

the exam questions used this quarter will be similar but different

from these example questions – understanding the main concepts in each

chapter is critical to success on the testing events; remembering a

sample question may be of some help but the format of questions on the

same topic often differs rendering memory a distant second choice to

understanding.

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.

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)

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:

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

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:

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