Francois French manufactures cheese, which he normally sells at €20/kg, on which sales commission of 5% is paid. Plant capacity is 7,500 kg/month. Income tax is levied at 30%. Costs per kg. Flxed costs Plant depreciation €8,000 Direct materials €4 Other plant costs 15,000 Direct labor 2 Corporate salaries 10,000 Var, factory O/H Advertising 3,000 If sales are 5,000 kgs, which of the following is true? Total contribution margin is €50,000 Ratio of total contribution margin to net income before taxes is 3.57 Taxes payable are €4,200 Operating leverage is 42% All of the above 3.

Francois French manufactures cheese, which he normally sells at €20/kg, on which sales commission of 5% is paid. Plant capacity is 7,500 kg/month. Income tax is levied at 30%. Costs per kg. Flxed costs Plant depreciation €8,000 Direct materials €4 Other plant costs 15,000 Direct labor 2 Corporate salaries 10,000 Var, factory O/H Advertising 3,000 If sales are 5,000 kgs, which of the following is true? Total contribution margin is €50,000 Ratio of total contribution margin to net income before taxes is 3.57 Taxes payable are €4,200 Operating leverage is 42% All of the above 3.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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