18 - 1 Cost-Volume-Profit 91.Sales are $500,000 and variable costs are $350,000. What is the...1 answer below »

18 - 1

Cost-Volume-Profit

91.Sales are $500,000 and variable costs are $350,000. What is the contribution margin ratio?

a.43%

b.30%

c.70%

d.Cannot be determined because amounts are not expressed per unit.

92.Dunbar Manufacturing’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $44,000. If sales are expected to increase $80,000, by how much will the company's net income increase?

a.$36,000

b.$56,000

c.$24,000

d.$12,000

93.Weatherspoon Company has a product with a selling price per unit of $200, the unit variable cost is $90, and the total monthly fixed costs are $300,000. How much is Weatherspoon’s contribution margin ratio?

a.55%

b.45%

c.150%

d.222%

94.Armstrong Industries has a contribution margin of $300,000 and a contribution margin ratio of 30%. How much are total variable costs?

a.$90,000

b.$700,000

c.$210,000

d.$1,000,000

95.Zehms, Inc. has a contribution margin per unit of $21 and a contribution margin ratio of 60%. How much is the selling price of each unit?

a.$35.00

b.$52.50

c.$12.60

d.Cannot be determined without more information.

96.A division sold 100,000 calculators during 2013:

Sales$2,000,000

Materials$380,000

Order processing150,000

Billing labor110,000

Selling expenses 60,000

Total variable costs700,000

Fixed costs1,000,000

How much is the contribution margin per unit?

a.$2

b.$7

c.$17

d.$13

97.At the break-even point of 2,000 units, variable costs are $110,000, and fixed costs are $64,000. How much is the selling price per unit?

a.$87

b.$23

c.$32

d.Not enough information

98.The following information is available for Wade Corp.:

Sales$550,000Total fixed expenses$150,000

Cost of goods sold390,000Total variable expenses360,000

A CVP income statement would report

a.gross profit of $160,000.

b.contribution margin of $400,000.

c.gross profit of $190,000.

d.contribution margin of $190,000.

99.Which is the true statement?

a.In a CVP income statement, costs and expenses are classified only by function.

b.The CVP income statement is prepared for both internal and external use.

c.The CVP income statement shows contribution margin instead of gross profit.

d.In a traditional income statement, costs and expenses are classified as either variable or fixed.

100.The equation which reflects a CVP income statement is

a.Sales = Cost of goods sold + Operating expenses + Net income.

b.Sales + Fixed costs = Variable costs + Net income.

c.Sales – Variable costs + Fixed costs = Net income.

d.Sales – Variable costs – Fixed costs = Net income.

Mar 01 2021 12:22 PM

1 Approved Answer

shashikant k
answered on
March 03, 2021

5
Ratings,(9 Votes)

Cost-Volume-Profit

91.Sales are $500,000 and variable costs are $350,000. What is the contribution margin ratio?

a.43%

b.30%

c.70%

d.Cannot be determined because amounts are not expressed per unit.

Ans :

b.30%

Contribution margin ratio = contribution margin/ sales revenue x 100 = (500,000 - 350,000)/500,000 x 100 = 30%

92.Dunbar Manufacturing’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $44,000. If sales are expected to increase $80,000, by how much will the company's net income increase?

a.$36,000

b.$56,000

c.$24,000

d.$12,000

Ans :

b.$56,000

Variable costs = 0.3 x sales

Contribution margin = sales x (1 -0.3) = 0.7 x sales

Increase in contribution margin = 0.7 x 80000 = 56000

93.Weatherspoon Company has a product with a selling price per unit of $200, the unit variable cost is $90, and the total monthly fixed costs are $300,000. How much is Weatherspoon’s contribution margin ratio?

a.55%

b.45%

c.150%

d.222%

Ans :

a.55%

Contribution margin ratio = contribution margin per unit / selling price per unit x 100 = (200 - 90)/200 x 100 =...

## 1 Approved Answer

March 03, 2021Cost-Volume-Profit

91.Sales are $500,000 and variable costs are $350,000. What is the contribution margin ratio?

a.43%

b.30%

c.70%

d.Cannot be determined because amounts are not expressed per unit.

Ans :

b.30%

Contribution margin ratio = contribution margin/ sales revenue x 100 = (500,000 - 350,000)/500,000 x 100 = 30%

92.Dunbar Manufacturing’s variable costs are 30% of sales. The company is contemplating an advertising campaign that will cost $44,000. If sales are expected to increase $80,000, by how much will the company's net income increase?

a.$36,000

b.$56,000

c.$24,000

d.$12,000

Ans :

b.$56,000

Variable costs = 0.3 x sales

Contribution margin = sales x (1 -0.3) = 0.7 x sales

Increase in contribution margin = 0.7 x 80000 = 56000

93.Weatherspoon Company has a product with a selling price per unit of $200, the unit variable cost is $90, and the total monthly fixed costs are $300,000. How much is Weatherspoon’s contribution margin ratio?

a.55%

b.45%

c.150%

d.222%

Ans :

a.55%

Contribution margin ratio = contribution margin per unit / selling price per unit x 100 = (200 - 90)/200 x 100 =...

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