Solution-Determine the selling price per unit

Determine the selling price per unit

Reference no: EM131016367

Question 1

If variable costs increase, fixed costs increase, and sales remain the same, what is expected to happen to the Contribution Margin (CM) and to the Break-even Point (BE) respectively?

CM: Decrease
BE: Increase

CM: Increase
BE: Decrease

CM: Decrease
BE: Decrease

CM: Decrease
BE: Can't be determined

Question 2

The break-even point is the point at which

fixed costs equal variable costs

fixed costs equal sales

total contribution margin equals fixed costs

sales equals variable costs

Question 3

Singer Co. reported sales of $416,000, a contribution margin of $5 per unit, fixed costs of $80,000, and a net income of $24,000. Determine the selling price per unit?

$26

$20

$86.70

$5

Question 4

Use the following information to answer questions 4 & 5

Projected cost information for a new product is as follows:
Variable manufacturing costs:$8 per unit
Variable selling costs:$2 per unit
Fixed manufacturing costs:$25,000
Fixed selling costs:$45,000

The product is to be sold at $18 per unit. Determine the break-even point for this product (in $)

$45,000

$126,000

$157,500

$8,750

Question 5

Use the following information to answer questions 4 & 5

Projected cost information for a new product is as follows:
Variable manufacturing costs:$8 per unit
Variable selling costs:$2 per unit
Fixed manufacturing costs:$25,000
Fixed selling costs:$45,000

The product is to be sold at $18 per unit. What price would the company have to sell this product for if they wish to sell 10,000 units and realize a profit of $50,000?

$18

$22

$12

$5

Question 6

Gastone Inc. has estimated the following forecasted sales for a 3-month period:

Month Estimated sales $
August 33,000
September29,000
October 30,000

On average, 60% of sales are collected in the month of sale, 39% in the following month, and the remaining 1% is never collected. Determine the budgeted cash receipts for September.

$29,000

$30, 270

$31,110

$29,100

Question 7

Garth Inc. has gathered the following monthly budget numbers based on a budgeted production level of 2,000 units:
Direct Materials$30,000
Factory property taxes$10,000
Factory utilities$3,000

The actual production level during February was 3,000 units. Based on the information provided, determine the estimated direct material & factory property taxes, respectively, for February.

$30,000 and $15,000

$30,000 and $10,000

$45,000 and and $15,000

$45,000 and $10,000

Question 8

Use the following information to answer questions 8 & 9.

Projected sales, beginning & ending inventory for Sommers Inc. for March 2013 is as follows:

Sales50,000 units
FG Beg. Inv.4,000 units
FG End. Inv.8,000 units

The selling price is $40 per unit. Each unit requires 4 pounds of material which costs $6 per pound. The beginning inventory of raw materials is 12,000 pounds. The company wants to have 3,000 pounds of material in inventory at the end of March 2013. Determine Sommers' budgeted production for March 2013.

54,000 units

46,000 units

62,000 units

38,000 units

Question 9

Use the following information to answer questions 8 & 9.

Projected sales, beginning & ending inventory for Sommers Inc. for March 2013 is as follows:
Sales50,000 units
FG Beg. Inv.4,000 units
FG End. Inv.8,000 units

The selling price is $40 per unit. Each unit requires 4 pounds of material which costs $6 per pound. The beginning inventory of raw materials is 12,000 pounds. The company wants to have 3,000 pounds of material in inventory at the end of March 2013. Determine the budgeted material purchases for March 2013.

$1,350,000

$1,242,000

$1,206,000

$1,296,000

Question 10

Polar Fans has prepared all the necessary budgets and is attempting to prepare their forecasted income statement. Given that the budgeted total manufacturing cost is $600,000, the budgeted beginning and ending WIP balances are $120,000 and $170,000 respectively, the budgeted costs of goods manufactured is $550,000, and the budgeted beginning and ending FG inventories are $60,000 and $78,000, determine the budgeted cost of goods sold for Polar Fans.

$500,000

$532,000

$482,000

$568,000

Question 11
The following information was reported for Lake Co.

Beginning cash balance$24,000
Cash payments$42,000
Cash receipts$29,000
Minimum cash balance desired$22,000

How much cash will Lake Co. have to borrow to meet its minimum cash requirements?

$0

$9,000

$11,000

$13,550

Question 12

Use the following information to answer questions 12 - 15

The budgeted and actual costs at Goodyear Company is as follows:
Budgeted costsActual costs:

Materials (per tire): 12 lbs @ $1.80/lbTotal materials purchased: 840,000lbs
Labor (per tire): 4 hrs. @ $14/hrTotal cost of purchase: $1,554,000
Factory O/H (per tire): 3 hrs. @ $8/hrTotal material used: 849,600 lbs
Labor (per tire): 4.1 hrs @ $13/hr
Factory O/H (per tire): 2.8 hrs @ $8.50/hr

During October, Goodyear produced 72,000 tires. The budgeted cost and actual cost, respectively, of producing one tire is (to the nearest $)

$102 and $98

$102 and $99

$102 and $95

$78 and $98

Question 13

Use the following information to answer questions 12 - 15

The budgeted and actual costs at Goodyear Company is as follows:

Budgeted costsActual costs
Materials (per tire): 12 lbs @ $1.80/lbTotal materials purchased: 840,000lbs
Labor (per tire): 4 hrs. @ $14/hrTotal cost of purchase: $1,554,000
Factory O/H (per tire): 3 hrs. @ $8/hrTotal material used: 849,600 lbs
Labor (per tire): 4.1 hrs @ $13/hr
Factory O/H (per tire): 2.8 hrs @ $8.50/hr

During October, Goodyear produced 72,000 tires. The direct materials price variance is:

$42,480 (U)

$42,480 (F)

$42,000 (U)

$42,000 (F)

Question 14

$44,400 (U)

$25,920 (F)

$25,920 (U)

Question 15

$72,000 (U)

$100,800 (F)

$100,800 (U)

Question 16

Excel Co. has collected the following data for April 2001:

Budgeted direct labor: 3 hours per unit at $6 per hour
Direct labor efficiency variance: $1,200 (U)
Actual direct labor cost: $28,900
Units produced: 1,600

The number of direct labor hours actually worked during April is:

4,500

4,800

5,000

4,600

Question 17

What type of direct material variances for quantity and price will arise if the actual number of pounds of material used exceeds budgeted pounds but actual cost per pound was less than budgeted cost per pound?

Qty: Unfavorable
Price: Favorable

Qty: Favorable
Price: Favorable

Qty: Favorable
Price: Unfavorable

Qty: Unfavorable
Price: Unfavorable

Reference no: EM131016367

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Determine the selling price per unit

Reference no: EM131016367

Reference no: EM131016367

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