Unlock document.
This document is partially blurred.
Unlock all pages and 1 million more documents.
Get Access
168) A manufacturer of cedar shingles has supplied the following data:
Bundles of cedar shakes produced and sold
360,000
Sales revenue
$
2,412,000
Variable manufacturing expense
$
1,170,000
Fixed manufacturing expense
$
714,000
Variable selling and administrative expense
$
414,000
Fixed selling and administrative expense
$
82,000
Net operating income
$
32,000
The company's contribution margin ratio is closest to:
A) 72.6%
B) 65.7%
C) 34.3%
D) 27.4%
169) A manufacturer of cedar shingles has supplied the following data:
Bundles of cedar shakes produced and sold
360,000
Sales revenue
$
2,412,000
Variable manufacturing expense
$
1,170,000
Fixed manufacturing expense
$
714,000
Variable selling and administrative expense
$
414,000
Fixed selling and administrative expense
$
82,000
Net operating income
$
32,000
The company's degree of operating leverage is closest to:
A) 11.25
B) 25.88
C) 1.99
D) 75.38
170) A manufacturer of tiling grout has supplied the following data:
Kilograms produced and sold
380,000
Sales revenue
$
2,736,000
Variable manufacturing expense
$
1,349,000
Fixed manufacturing expense
$
336,000
Variable selling and administrative expense
$
399,000
Fixed selling and administrative expense
$
372,000
Net operating income
$
280,000
The company's break-even in unit sales is closest to:
A) 272,308
B) 98,333
C) 92,055
D) 60,488
171) A manufacturer of tiling grout has supplied the following data:
Kilograms produced and sold
380,000
Sales revenue
$
2,736,000
Variable manufacturing expense
$
1,349,000
Fixed manufacturing expense
$
336,000
Variable selling and administrative expense
$
399,000
Fixed selling and administrative expense
$
372,000
Net operating income
$
280,000
The company's contribution margin ratio is closest to:
A) 28.9%
B) 63.9%
C) 71.1%
D) 36.1%
172) A manufacturer of tiling grout has supplied the following data:
Kilograms produced and sold
380,000
Sales revenue
$
2,736,000
Variable manufacturing expense
$
1,349,000
Fixed manufacturing expense
$
336,000
Variable selling and administrative expense
$
399,000
Fixed selling and administrative expense
$
372,000
Net operating income
$
280,000
The company's degree of operating leverage is closest to:
A) 9.77
B) 1.36
C) 3.53
D) 2.47
173) Houpe Corporation produces and sells a single product. Data concerning that product
appear below:
Per Unit
Percent of Sales
Selling price
$
140
100
%
Variable expenses
42
30
%
Contribution margin
$
98
70
%
Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month.
The marketing manager believes that a $14,000 increase in the monthly advertising budget
would result in a 150 unit increase in monthly sales. What should be the overall effect on the
company's monthly net operating income of this change?
A) increase of $700
B) increase of $14,700
C) decrease of $14,000
D) decrease of $700
174) Houpe Corporation produces and sells a single product. Data concerning that product
appear below:
Per Unit
Percent of Sales
Selling price
$
140
100
%
Variable expenses
42
30
%
Contribution margin
$
98
70
%
Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month.
Management is considering using a new component that would increase the unit variable cost by
$5. Since the new component would increase the features of the company's product, the
marketing manager predicts that monthly sales would increase by 300 units. What should be the
overall effect on the company's monthly net operating income of this change?
A) decrease of $2,100
B) decrease of $27,900
C) increase of $2,100
D) increase of $27,900
175) Houpe Corporation produces and sells a single product. Data concerning that product
appear below:
Per Unit
Percent of Sales
Selling price
$
140
100
%
Variable expenses
42
30
%
Contribution margin
$
98
70
%
Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month.
The marketing manager would like to cut the selling price by $7 and increase the advertising
budget by $28,000 per month. The marketing manager predicts that these two changes would
increase monthly sales by 500 units. What should be the overall effect on the company's monthly
net operating income of this change?
A) decrease of $17,500
B) increase of $17,500
C) decrease of $24,500
D) increase of $38,500
176) Houpe Corporation produces and sells a single product. Data concerning that product
appear below:
Per Unit
Percent of Sales
Selling price
$
140
100
%
Variable expenses
42
30
%
Contribution margin
$
98
70
%
Fixed expenses are $490,000 per month. The company is currently selling 6,000 units per month.
The marketing manager would like to introduce sales commissions as an incentive for the sales
staff. The marketing manager has proposed a commission of $11 per unit. In exchange, the sales
staff would accept a decrease in their salaries of $58,000 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 100 units. What should be the overall effect on the
company's monthly net operating income of this change?
A) increase of $700
B) increase of $56,900
C) decrease of $115,300
D) increase of $588,700
177) Data concerning Lemelin Corporation's single product appear below:
Per Unit
Percent of Sales
Selling price
$
230
100
%
Variable expenses
115
50
%
Contribution margin
$
115
50
%
The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month.
Management is considering using a new component that would increase the unit variable cost by
$3. Since the new component would increase the features of the company's product, the
marketing manager predicts that monthly sales would increase by 200 units. What should be the
overall effect on the company's monthly net operating income of this change?
A) decrease of $22,400
B) decrease of $1,400
C) increase of $22,400
D) increase of $1,400
178) Data concerning Lemelin Corporation's single product appear below:
Per Unit
Percent of Sales
Selling price
$
230
100
%
Variable expenses
115
50
%
Contribution margin
$
115
50
%
The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month.
The marketing manager believes that an $11,000 increase in the monthly advertising budget
would result in a 100 unit increase in monthly sales. What should be the overall effect on the
company's monthly net operating income of this change?
A) decrease of $11,000
B) increase of $11,500
C) decrease of $500
D) increase of $500
179) Data concerning Lemelin Corporation's single product appear below:
Per Unit
Percent of Sales
Selling price
$
230
100
%
Variable expenses
115
50
%
Contribution margin
$
115
50
%
The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month.
The marketing manager would like to introduce sales commissions as an incentive for the sales
staff. The marketing manager has proposed a commission of $20 per unit. In exchange, the sales
staff would accept a decrease in their salaries of $113,000 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 300 units. What should be the overall effect on the
company's monthly net operating income of this change?
A) decrease of $224,500
B) increase of $107,000
C) increase of $1,500
D) increase of $806,500
180) Data concerning Lemelin Corporation's single product appear below:
Per Unit
Percent of Sales
Selling price
$
230
100
%
Variable expenses
115
50
%
Contribution margin
$
115
50
%
The company is currently selling 7,000 units per month. Fixed expenses are $581,000 per month.
The marketing manager would like to cut the selling price by $18 and increase the advertising
budget by $37,000 per month. The marketing manager predicts that these two changes would
increase monthly sales by 1,600 units. What should be the overall effect on the company's
monthly net operating income of this change?
A) increase of $118,200
B) increase of $302,200
C) decrease of $118,200
D) decrease of $7,800
181) Thornbrough Corporation produces and sells a single product with the following
characteristics:
Per Unit
Percent of Sales
Selling price
$
220
100
%
Variable expenses
44
20
%
Contribution margin
$
176
80
%
The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month.
Management is considering using a new component that would increase the unit variable cost by
$11. Since the new component would increase the features of the company's product, the
marketing manager predicts that monthly sales would increase by 500 units. What should be the
overall effect on the company's monthly net operating income of this change?
A) increase of $82,500
B) decrease of $5,500
C) decrease of $82,500
D) increase of $5,500
182) Thornbrough Corporation produces and sells a single product with the following
characteristics:
Per Unit
Percent of Sales
Selling price
$
220
100
%
Variable expenses
44
20
%
Contribution margin
$
176
80
%
The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month.
The marketing manager believes that a $28,000 increase in the monthly advertising budget
would result in a 190 unit increase in monthly sales. What should be the overall effect on the
company's monthly net operating income of this change?
A) decrease of $28,000
B) increase of $33,440
C) increase of $5,440
D) decrease of $5,440
183) Thornbrough Corporation produces and sells a single product with the following
characteristics:
Per Unit
Percent of Sales
Selling price
$
220
100
%
Variable expenses
44
20
%
Contribution margin
$
176
80
%
The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month.
The marketing manager would like to cut the selling price by $18 and increase the advertising
budget by $53,000 per month. The marketing manager predicts that these two changes would
increase monthly sales by 1,000 units. What should be the overall effect on the company's
monthly net operating income of this change?
A) decrease of $105,000
B) increase of $149,000
C) increase of $105,000
D) decrease of $21,000
184) Thornbrough Corporation produces and sells a single product with the following
characteristics:
Per Unit
Percent of Sales
Selling price
$
220
100
%
Variable expenses
44
20
%
Contribution margin
$
176
80
%
The company is currently selling 7,000 units per month. Fixed expenses are $901,000 per month.
The marketing manager would like to introduce sales commissions as an incentive for the sales
staff. The marketing manager has proposed a commission of $11 per unit. In exchange, the sales
staff would accept a decrease in their salaries of $65,000 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 300 units. What should be the overall effect on the
company's monthly net operating income of this change?
A) increase of $1,269,500
B) increase of $37,500
C) increase of $61,700
D) decrease of $92,500
185) Heathman Inc. produces and sells a single product. The selling price of the product is
$230.00 per unit and its variable cost is $89.70 per unit. The fixed expense is $308,660 per
month.
The break-even in monthly unit sales is closest to:
A) 2,328 units
B) 1,342 units
C) 3,441 units
D) 2,200 units
186) Heathman Inc. produces and sells a single product. The selling price of the product is
$230.00 per unit and its variable cost is $89.70 per unit. The fixed expense is $308,660 per
month.
The break-even in monthly dollar sales is closest to:
A) $791,436
B) $535,365
C) $506,000
D) $308,660
187) Data concerning Sinisi Corporation's single product appear below:
Selling price per unit
$
200.00
Variable expense per unit
$
58.00
Fixed expense per month
$
407,540
The break-even in monthly unit sales is closest to:
A) 2,038 units
B) 7,027 units
C) 2,870 units
D) 3,978 units
