Question

Question S Answer the following multiple choice questions: (15 mark Answer The margin of safety is A the eces of budgeted or actual sales over budgeted or actual variable expenses B) the escess of budgeted or actual sales over budgeted or actual fixed expenses C) the encess of budgeted or actual sales over the break-even volume of sales D) the escess of budgeted net operating income over actual net operating income Sparks Company has a cash balance of $7,500 on April 1. The company must maintain a minimum cash balan of $6,000 During April, cash receipts of $48,000 are planned. Cash disbursements during the expected to total $52,000 Ignoring interest payments, during April the company will need to borrow A) $3,500 B) S2.500 C) 56,000 D) $4,000 3. The following data have been collected for four different cost items. Cost ItemCost at 100 tsCost at 140 nit 58,000 55,000 56.500 6,700 10.,560 $5,000 $9,100 $8.580 7 Which of the following classifications of these cost items by cost behavior is correct? Cost W CostX CostY Cost Z A) variable fixed mixed variable B) mixed fixed variable mixed C) variable fixed variable variable D) mixed fixed mixed mixed 4 Which of the following costs, if expressed on a per unit basis, would be expected to vary inversely with t level of production and sales? A) Sales commissions B) Fixed manufacturing overhead. C) Variable manufacturing overhead. D) Direct materials. en the cost formula, Y $9,000+$2.50X, total cost for an activity level of 2.000 units would be:

Answer 1

	Q1)	Answer C
		The excess of budgeted or actual sales over the break-even
		volume of sales
	Q2)	Answer	B
		opening balance of cash			7,500
		cash receipts			48,000
		total cash available			55,500
		less:disbursement			52,000
		Excess(Deficiency)			3,500
		borrowed			2,500	answer
		ending balance of cash			6,000
	Q3)	Answer	B
	Q4)	Answer B
		Fixed manufacturing overhead
	Q5)	Y = $9000+2.50X
		y   = $9000+2000*2.5
			14000
		Answer B