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156) McCoy Brothers manufactures and sells two products, A and Z in the ratio of 5:2. Product A sells
for $75; Z sells for $95. Variable costs for product A are $35; for Z $40. Fixed costs are $418,500.
Compute the break-even point in composite units.
A) 1,395. B) 1,550. C) 2,092. D) 3,805. E) 1,350.
157) McCoy Brothers manufactures and sells two products, A and Z in the ratio of 5:2. Product A sells
for $75; Z sells for $95. Variable costs for product A are $35; for Z $40. Fixed costs are $418,500.
Compute the number of units of Product A McCoy must sell to break even.
A) 2,700. B) 6,750. C) 1,350. D) 6,200. E) 10,463.
158) McCoy Brothers manufactures and sells two products, A and Z in the ratio of 4:2. Product A sells
for $75; Z sells for $95. Variable costs for product A are $35; for Z $40. Fixed costs are $418,500.
Compute the number of units of Product Z McCoy must sell to break even.
A) 1,350. B) 6,200. C) 10,463. D) 6,750. E) 3,100.
B) $190.
C) $450.
D) $270.
E) $180.
159) Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable
costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Compute the
contribution margin per unit.
A) $200.
160) Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable
costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Compute the
contribution margin ratio.
A) 40.0%. B) 50.0%. C) 19.3%. D) 20.7%. E) 66.7%.
161) Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable
costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Compute the
break-even point in units.
A) 2,900. B) 1,160. C) 1,933. D) 5,500. E) 4,444.
162) Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable
costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Compute the
break-even point in dollars.
A) $2,000,000.
B) $2,640,000.
C) $1,304,348.
D) $4,202,899.
E) $1,740,000.
163) Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable
costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Flannigan
Company management targets an annual pre-tax income of $1,125,000. Compute the unit sales to
earn the target pre-tax net income.
A) 10,694. B) 7,500. C) 6,650. D) 11,750. E) 4,444.
164) Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable
costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Flannigan
Company management targets an annual pre-tax income of $1,125,000. Compute the dollar sales to
earn the target pre-tax net income.
A) $2,991,004.
B) $3,378,378.
C) $4,812,500.
D) $2,612,613.
E) $5,640,000.
165) Flannigan Company manufactures and sells a single product that sells for $450 per unit; variable
costs are $270. Annual fixed costs are $800,000. Current sales volume is $4,200,000. Compute the
current margin of safety in dollars for Flannigan Company.
A) $2,200,000.
B) $2,460,000.
C) $2,895,652.
D) $1,560,000.
E) $2,000,000.
166) Carver Packing Company reports total contribution margin of $72,000 and pretax net income of
$24,000 for the current month. In the next month, the company expects sales volume to increase by
8%. The degree of operating leverage and the expected percent change in income, respectively, are:
A) 0.33 and 2.7%
B) 3.0 and 8%
C) 3.0 and 24%
D) 4.0 and 32%
E) 0.33 and 8%
167) Morse Company reports total contribution margin of $48,000 and pretax net income of $12,000 for
the current month. The degree of operating leverage is:
A) 0.25 B) 250% C) 2.5 D) 4.0 E) 1.25
168) A manufacturer reports the following costs to produce 10,000 units in its first year of operations:
Direct materials, $10 per unit, Direct labor, $6 per unit, Variable overhead, $70,000, and Fixed
overhead, $120,000. The total product cost per unit under absorption costing is:
A) $28 per unit.
B) $35 per unit.
C) $23 per unit.
D) $17 per unit.
E) $16 per unit.
169) A manufacturer reports the following costs to produce 10,000 units in its first year of operations:
Direct materials, $10 per unit, Direct labor, $6 per unit, Variable overhead, $70,000, and Fixed
overhead, $120,000. The total product cost per unit under variable costing is:
A) $28 per unit.
B) $17 per unit.
C) $16 per unit.
D) $35 per unit.
E) $23 per unit.
170) A manufacturer reports the following costs to produce 10,000 units in its first year of operations:
Direct materials, $10 per unit, Direct labor, $6 per unit, Variable overhead, $70,000, and Fixed
overhead, $120,000. Of the 10,000 units produced, 9,200 were sold, and 800 remain in inventory at
year-end. Under absorption costing, the value of the inventory is:
A) $28,000. B) $22,400. C) $12,800. D) $18,400. E) $13,600.
171) A manufacturer reports the following costs to produce 10,000 units in its first year of operations:
Direct materials, $10 per unit, Direct labor, $6 per unit, Variable overhead, $70,000, and Fixed
overhead, $120,000. Of the 10,000 units produced, 9,200 were sold, and 800 remain in inventory at
year-end. Under variable costing, the value of the inventory is:
A) $28,000. B) $12,800. C) $22,400. D) $18,400. E) $13,600.
