Question

QUESTION 32 Budgeted production needs are determined by adding budgeted sales in units to the desired ending inventory in units and deducting the beginning inventory in units from this total True O False QUESTION 33 Which of the following strategies could be used to reduce the break-even point? O 1.INCREASE Fixed Expenses and INCREASE Contribution Margin O 2. INCREASE Fixed Expenses and DECREASE Contribution Margin 3. DECREASE Fixed Expenses and INCREASE Contribution Margin O 4. DECREASE Fixed Expenses and DECREASE Contribution Margin QUESTION 34 Betz Company's sales budget shows the following projections for next year: First Quarte Second Quarter.. Third Quarter Fourth Quarte. Sales in units 60,000 80,000 45,000 55,000 Inventory at the beginning of the year was 18,000 units. The finished goods inventory at the end of each quarter is to equal 30% of the next quarter's budgeted unit sales. How many units should be produced during the first quarter? 1.66,000 О 2.24,000 3.48,000 O 4.72,000

Answer 1

32)

Answer is True.

Explanation:

Budgeted production = Budgeted sales + Desired ending inventory - Beginning inventory

33)

Answer is 3. DECREASE Fixed Expenses and INCREASE Contribution Margin.

Explanation:

Break even point = Fixed expense / contribution margin

For example let's say fixed expense is $ 50000 and contribution margin is $50 per unit then break even would be 1000 units. If we decrease fixed expenses to $40000 and increase contribution margin to $60 per unit then break even point will be $40000/60 = 666.67 i.e. 667 units. Any increase in denominator and decrease in numerator will reduce the overall value.

34)

Answer is 1. 66000 units.

Explanation:

Units should be produced in first quarter = Budgeted sales + Desired ending inventory - Beginning inventory

=60000 units + (80000*30%) - 18000 units = 60000 units + 24000 units - 18000 units = 66000 units.