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125.
Boenisch Corporation produces and sells a single product with the following
characteristics:
Per Unit
Percent of Sales
Selling price
$170
100%
Variable expenses
102
60%
Contribution margin
$68
40%
Sales (at $170 per unit)
Variable expenses (at $102 per unit)
Contribution margin
Fixed expenses ($10,000 increase)
Net operating income
The company is currently selling 8,000 units per month. Fixed expenses are $406,000 per
month. Consider each of the following questions independently.
This question is to be considered independently of all other questions relating to
Boenisch Corporation. Refer to the original data when answering this question.
The marketing manager believes that a $10,000 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?
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126.
Boenisch Corporation produces and sells a single product with the following
characteristics:
Per Unit
Percent of Sales
Selling price
$170
100%
Variable expenses
102
60%
Contribution margin
$68
40%
9,800 units
Sales (at $170 per unit and $158 per unit)
Variable expenses (at $102 per unit)
999,600
Contribution margin
Fixed expenses (increase by $30,000)
436,000
Net operating income
The company is currently selling 8,000 units per month. Fixed expenses are $406,000 per
month. Consider each of the following questions independently.
This question is to be considered independently of all other questions relating to
Boenisch Corporation. Refer to the original data when answering this question.
The marketing manager would like to cut the selling price by $12 and increase the
advertising budget by $30,000 per month. The marketing manager predicts that these two
changes would increase monthly sales by 1,800 units. What should be the overall effect on
the company’s monthly net operating income of this change?
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127.
Boenisch Corporation produces and sells a single product with the following
characteristics:
Per Unit
Percent of Sales
Selling price
$170
100%
Variable expenses
102
60%
Contribution margin
$68
40%
Sales (at $170 per unit)
$1,360,000
Variable expenses (at $102 per unit and $118 per unit)
Contribution margin
Fixed expenses (decrease by $102,000)
Net operating income
The company is currently selling 8,000 units per month. Fixed expenses are $406,000 per
month. Consider each of the following questions independently.
This question is to be considered independently of all other questions relating to
Boenisch Corporation. Refer to the original data when answering this question.
The marketing manager would like to introduce sales commissions as an incentive for the
sales staff. The marketing manager has proposed a commission of $16 per unit. In
exchange, the sales staff would accept a decrease in their salaries of $102,000 per month.
(This is the company’s savings for the entire sales staff.) The marketing manager predicts
that introducing this sales incentive would increase monthly sales by 700 units. What
should be the overall effect on the company’s monthly net operating income of this
change?
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128.
Smee Inc. produces and sells a single product. The selling price of the product is $130.00
per unit and its variable cost is $52.00 per unit. The fixed expense is $281,580 per month.
The break-even in monthly unit sales is closest to:
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129.
Smee Inc. produces and sells a single product. The selling price of the product is $130.00
per unit and its variable cost is $52.00 per unit. The fixed expense is $281,580 per month.
The break-even in monthly dollar sales is closest to:
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130.
Blackner Corporation produces and sells a single product. Data concerning that product
appear below:
Selling price per unit
$220.00
Variable expense per unit
$70.40
Fixed expense per month
$492,184
The break-even in monthly unit sales is closest to:
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131.
Blackner Corporation produces and sells a single product. Data concerning that product
appear below:
Selling price per unit
$220.00
Variable expense per unit
$70.40
Fixed expense per month
$492,184
The break-even in monthly dollar sales is closest to:
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132.
Data concerning Kuralt Corporation’s single product appear below:
Selling price per unit
$220.00
Variable expense per unit
$57.20
Fixed expense per month
$310,948
The break-even in monthly unit sales is closest to:
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133.
Data concerning Kuralt Corporation’s single product appear below:
Selling price per unit
$220.00
Variable expense per unit
$57.20
Fixed expense per month
$310,948
The break-even in monthly dollar sales is closest to:
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134.
Moccio Enterprises, Inc., produces and sells a single product whose selling price is
$120.00 per unit and whose variable expense is $37.20 per unit. The company’s monthly
fixed expense is $356,040.
Assume the company’s target profit is $14,000. The unit sales to attain that target profit is
closest to:
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135.
Moccio Enterprises, Inc., produces and sells a single product whose selling price is
$120.00 per unit and whose variable expense is $37.20 per unit. The company’s monthly
fixed expense is $356,040.
Assume the company’s target profit is $15,000. The dollar sales to attain that target profit
is closest to:
136.
Data concerning Matsumoto Corporation’s single product appear below:
Selling price per unit
$130.00
Variable expense per unit
$52.00
Fixed expense per month
$280,800
Assume the company’s target profit is $5,000. The unit sales to attain that target profit is
closest to:
137.
Data concerning Matsumoto Corporation’s single product appear below:
Selling price per unit
$130.00
Variable expense per unit
$52.00
Fixed expense per month
$280,800
Assume the company’s target profit is $8,000. The dollar sales to attain that target profit
is closest to:
138.
Upchurch Corporation produces and sells a single product. Data concerning that product
appear below:
Selling price per unit
$100.00
Variable expense per unit
$34.00
Fixed expense per month
$312,180
Assume the company’s target profit is $12,000. The unit sales to attain that target profit is
closest to:
139.
Upchurch Corporation produces and sells a single product. Data concerning that product
appear below:
Selling price per unit
$100.00
Variable expense per unit
$34.00
Fixed expense per month
$312,180
Assume the company’s target profit is $14,000. The dollar sales to attain that target profit
is closest to:
140.
Callicott Corporation produces a product that sells for $120 per unit. The product’s current
sales are 25,400 units and its break-even sales are 18,542 units.
What is the margin of safety in dollars?
141.
Callicott Corporation produces a product that sells for $120 per unit. The product’s current
sales are 25,400 units and its break-even sales are 18,542 units.
The margin of safety as a percentage of sales is closest to:
142.
Mcallister Corporation has provided the following data concerning its only product:
Selling price
$150 per unit
Current sales
39,900 units
Break-even sales
31,521 units
Margin of safety (in dollars)
$1,256,850
What is the margin of safety in dollars?