Question

help multiple choice questions questions 1-4

According to your text, a product cost is made up of variable and fixed costs. Which of the following is an example of Fixed costs? a. Material b. Direct Labor Cost C. Depreciation d. Sales Commission e. None of the above. 2. BEDA Toys Company determines its break-even strictly on the basis of cash expenditures related to fixed costs. If total fixed costs are $450,000, depreciation $22,500, price per unit $7.50, and variable cost $3, how many units does BEDA have to sell to reach its cash break- even point? a. 100,000 units b. 87,500 units c. 95,000 units d. 106,875 units e. None of the above. 3. In developing the pro forma income statement there are four steps in the process. Which of the following is the first step? a. The calculation of depreciation b. The Projection of Cash Receipts C. The Construction of a Pro forma Statement of Cash Flow d. The Projection of Sales e. None of the above. 4. Self-liquidating assets is a concept discussed in your text. What does it mean? That: a. Self-liquidating assets is financed by long-term capital b. The working capital associated with a product will be liquidated within a year period C. Assets associated with the production of a product will be liquidated over the depreciable life of the assets d. All the product will be sold, receivables collected and bills paid over the time period specified e. None of the above.

just in case the first question was blurry

Answer 1

	SOLUTION : 1
	Answer = Option C = Depreciation
	SOLUTION : 2
	CALCULATION OF CONTRIBUTION MARGIN
	Selling Price Per Unit=	$              7.50
	Less: Variable Cost Per Unit	$              3.00
	Contribution Margin Per Unit	$              4.50
	Cash Fixed Cost = Total Fixed Cost - Depreciation expenses
	CALCULATION OF THE BREAK EVEN POINT IN UNITS
	Break Even point =      Fixed Cost / Contribution Margin Per Unit
	Break Even point =
	Fixed Cost ($ 450,000 - $ 22,500)	$     4,27,500
	Divide By	"/" By
	Contribution Margin Per Unit =	$              4.50
	Break Even point =	95000	Units
	Answer = Option C = 95,000 Units
	SOLUTION : 3
	Answer = Option D = The Projection of Sales
	SOLUTION : 4
	Self liquidating assets are those assets which can generate cash flow against out cost
	Answer = Option A = Self - liquidating assets is financed by long-term capital