12/4 ACCT 2121 PAL Session Chapters 11 and 14

Using the following information, what would be reported as total net income or net loss on a CVP income statement?

Unit selling price: $95

Unit variable costs: $85

Total fixed costs: $192,000

Total cost of goods sold: $320,000

Units sold: 6,000

• -$132,000

• -$260,000

• -$392,000

• $252,000

A company sells a product with a unit sales price of $21, unit variable costs of $15, and have total fixed costs of $120,000 for the product. What is their breakeven point in units?

• 8,000

• 25,000

• 20,000

• 5,714

A company’s target net income is $290,000. Their product has a selling price per unit of $110, a variable cost per unit of $90 and total fixed costs of $130,000. How many units do they have sell to reach their target net income?

• 8,000

• 6,500

• 18,000

• 21,000

A company has a unit contribution margin of $50 and a contribution margin ratio of 60%. What is the unit selling price? Round to two decimal places.

• $83.33

• $120

• $30

• $35.46

Based on the following information, what would be reported as the contribution margin on the CVP Income Statement?

Unit selling price: $65

Unit variable costs: $40

Total fixed costs: $130,000

Units sold: 12,000

• $480,000

• $430,000

• $170,000

• $300,000

Which of the following is NOT a main objective of creating budgets?

• To help plan ahead for the whole business

• To help control by comparing actual results with budget

• To help increase participation and motivation of managers

• To meet legal requirements to publish all financial results

The following is the estimated sales budget for BOBS corporation. Accounts receivable are collected 60% in month of sale and 40% in the following month. How much cash is budgeted to be received in February? (All purchases were made on credit)

Budgeted sales January: $980,000

Budgeted sales February: $1,100,000

Budgeted sales March: $1,050,000

• $1,028,000

• $1,052,000

• $2,080,000

• $1,075,000

Whitman corporation has a beginning cash balance off $92,000. They had total cash receipts of $155,000 for quarter 1 and cash disbursements of $245,000 for quarter 1. They want to maintain a cash balance of at least $49,000. How much cash will they need to borrow at the end of quarter 1?

• $49,000

• $58,000

• $47,000

• $2,000

The following is budgeted purchases for direct materials. The company pays 50% of accounts payable in the month of sale, and 50% in the following month. What is the expected cash they must pay in July? (Assume all the purchases were made on credit)

Direct materials May: $1,260,000

Direct Materials June: $1,400,000

Direct Materials July: $1,320,000

• $1,360,000

• $1,330,000

• $1,290,000

• $1,240,000

The production budget shows expected unit sales of 18,000 units. Beginning finished good units are 6,000 units and the desired ending finished goods inventory is 3,000 units. How many units does the company need to produce?

• 24,000

• 21,000

• 18,000

• 15,000