Ch7 quiz1

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School

University of North Texas *

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Course

5130

Subject

Accounting

Date

Jan 9, 2024

Type

pdf

Pages

7

Uploaded by vnguyen3

11/3/23, 9:37 PM Assignment Print View https://ezto.mheducation.com/api/caa/activity/C15Print?jwt=eyJhbGciOiJSUzI1NiJ9.eyJlbnZpcm9ubWVudCI6InByb2QiLCJpc3MiOiJlenQiLCJwcmlud… 1/7 1. Award: 1 out of 1.00 point Score: 10/10 Points 100 % A recent income statement of McClennon Corporation reported the following data: Units sold 7,500 Sales revenue $ 8,812,500 Variable costs 4,500,000 Fixed costs 2,840,000 If the company desired to earn a target profit of $1,875,000, it would have to sell: 5,378 units. 8,200 units. 9,760 units. 11,508 units. None of the answers is correct. Contribution margin per unit = (Total Sales Total Variable costs) ÷ Number of Units; ($8,812,500 $4,500,000) ÷ 7,500 = $575 per unit; (Total Fixed cost + Target profit) ÷ Contribution Margin per unit = Total Sales Dollars; ($1,875,000 + $2,840,000) ÷ $575 = 8,200 units.
11/3/23, 9:37 PM Assignment Print View https://ezto.mheducation.com/api/caa/activity/C15Print?jwt=eyJhbGciOiJSUzI1NiJ9.eyJlbnZpcm9ubWVudCI6InByb2QiLCJpc3MiOiJlenQiLCJwcmlud… 2/7 2. Award: 1 out of 1.00 point 3. Award: 1 out of 1.00 point Bargain Town reported sales revenues of $1,008,000, a total contribution margin of $348,000, and fixed costs of $250,000. If sales volume amounted to 12,000 units, the company's variable cost per unit must have been: $17. $37. $55. $97. None of the answers is correct. Total Sales Total Contribution Margin = Total Variable costs; Total Variable costs ÷ Number of units = Variable cost per unit; ($1,008,000 $348,000) ÷ 12,000 = $55. Narchie sells a single product for $60. Variable costs are 70% of the selling price, and the company has fixed costs that amount to $630,000. Current sales total 26,000 units. In order to produce a target profit of $32,400, Narchie's dollar sales must total: $11,040. $36,944. $2,100,000. $2,208,000. None of the answers is correct. (Total Fixed cost + Target profit) ÷ Margin percentage = Total Sales Dollars; ($630,000 + $32,400) ÷ ($18 / $60) = $2,208,000.
11/3/23, 9:37 PM Assignment Print View https://ezto.mheducation.com/api/caa/activity/C15Print?jwt=eyJhbGciOiJSUzI1NiJ9.eyJlbnZpcm9ubWVudCI6InByb2QiLCJpc3MiOiJlenQiLCJwcmlud… 3/7 4. Award: 1 out of 1.00 point Narchie sells a single product for $60. Variable costs are 70% of the selling price, and the company has fixed costs that amount to $437,400. Current sales total 23,000 units. Narchie: will break-even by selling 7,290 units. will break-even by selling 19,714 units. will break-even by selling 24,300 units. will break-even by selling 1,458,000 units. cannot break-even because it loses money on every unit sold. Break-even in units = Total Fixed costs ÷ Fixed cost per unit; $437,400 ÷ [$60 ($60 × 70%)] = 24,300 units
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