Question

Nece 376.000 Chapter 18 Pop Test 2000xl = 275.000 1. A firm expects to sell 25.000 units of its product at Sil per unit. Pretax income is predicted to be $60,000. If the variable costs per unit are $5, total fixed costs must be: 5 2. During March, a fimm expects its total sales to be $160,000, its total variable costs to be 595,000, and its total fixed costs to be $25,000. The contribution margin for March is: S 3. A firm expects to sell 25,000 units of its product at $11 per unit and to incur variable costs per unit of $6. Total fixed costs are $70,000. The total contribution margin is: $ 4. A firm expects to sell 25.000 units of its product at $11 per unit and to incur variable costs per unit of $6. Total fixed costs are $70,000. The pretax net income is: 5 5. During its most recent fiscal year, Dover, Inc. had total sales of $3,200,000. Contribution margin amounted to $1,500,000 and pretax income was $400,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year in question? 6. During its most recent fiscal year, Dover, Inc. had total sales of $3,200,000. Contribution margin amounted to $1,500,000 and pretax income was $400,000. What amount should have been reported as fixed costs in the company's contribution margin income statement for the year in question? S_ 7. Henderson Co. has fixed costs of S36,000 and a contribution margin ratio of 24%. If expected sales are $200.000, what is the margin of safety as a percent of sales? 200.000 (2, 50.000 - 25 -> 25%. O BS Sales 36,000 5.24=15900 200,000 50, oi 8. A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 pretax income, how many units must be sold? 9. Fuschia Company's contribution margin per unit is $12. Total fixed costs are $84,000. What is Fuschia's break-even point in units? 10. A product sells for $200 per unit, and its variable costs are 65% of sales. The fixed costs are $420,000. What is the break-even point in sales dollars? S 11. Forrester Company is considering buying new equipment that would increase monthly fixed costs from $120,000 to $150,000 and would decrease the current variable costs of $70 by $10 per unit. The selling pri $100 is not expected to change. Forrester's current break-even sales are $400,000 and current break-even are 4,000. If Forrester purchases this new equipment, the revised contribution margin ratio would be:

Answer 1

1.

Fixed Cost is $90,000

Units		25,000.00
Selling Price	$/Per Unit	11.00
Sales		2,75,000.00
Variable cost	$/Per Unit	5.00
Variable cost		1,25,000.00
Contribution		1,50,000.00
Less: Fixed Cost (Balancing figure)	90,000.00
Pre Tax Profit		60,000.00

2. Contribution 65,000 and Contribution margin 40.6%

Sales		1,60,000.00
Variable cost		95,000.00
Contribution		65,000.00
Contribution %		40.6%
Less: Fixed Cost (Balancing figure)	25,000.00
Pre Tax Profit		40,000.00

3. Contibution 1,25,000 and contribution margin 45%

Units		25,000.00
Selling Price	$/Per Unit	11.00
Sales		2,75,000.00
Variable cost	$/Per Unit	6.00
Variable cost		1,50,000.00
Contribution		1,25,000.00
Contribution margin %		45%
Less: Fixed Cost (Balancing figure)	70,000.00
Pre Tax Profit		55,000.00

4. Pre Tax profit $ 55,000

Units		25,000.00
Selling Price	$/Per Unit	11.00
Sales		2,75,000.00
Variable cost	$/Per Unit	6.00
Variable cost		1,50,000.00
Contribution		1,25,000.00
Contribution margin %		45%
Less: Fixed Cost (Balancing figure)	70,000.00
Pre Tax Profit		55,000.00

5. Variable cost to be disclosed is $ 17,00,000

Sales		32,00,000.00
Variable cost		17,00,000.00
Contribution		15,00,000.00
Contribution %		46.9%
Less: Fixed Cost (Balancing figure)	11,00,000.00
Pre Tax Profit		4,00,000.00

6.            Fixed cost to be reported is $ 11,00,000

Sales		32,00,000.00
Variable cost		17,00,000.00
Contribution		15,00,000.00
Contribution %		46.9%
Less: Fixed Cost (Balancing figure)	11,00,000.00
Pre Tax Profit		4,00,000.00