Reference no: EM131776429
Bumble Inc. has a contribution margin ratio of 45%. This month, profit before tax was $40,000 and fixed cost were $50,000. How much was the company's sales revenue? (Rounding could cause your answerto not be exactly what is shown below, so choose the closest answer)
A. $200,000
B. $40,500
C. $90,000
D. $111,111
If the selling division cannot produce all the product required by a buying division without sacrificing sales to its current customers, when negotiating a transfer price, the highest price the buyer will be willing to pay (assuming he is currently buying his product in the market) is the _____________ price, while the lowest price the seller will be willing to accept is the _______________ cost.
Lyman company has the opportunity to increase annual revenues $100,000 by selling to a new, riskier group of customers. The bad debt expense is expected to be 15% of revenues (on these additional sales only) and collection costs will be 5% of revenues (on these additional sales only). The company's manufacturing and selling expenses are 70% of revenues on all sales and its effective tax rate is 40%. If Lyman should accept this opportunity, the company will increase its after-tax profits by
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A.
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$10,000
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B.
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$9,000
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C.
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$18,000
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D.
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$6,000
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Cost Volume Profit Analysis is used by
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A.
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For-profit organizations
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B.
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All of the above
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C.
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Nonprofit organizations
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D.
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Service organizations
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Lyman company has the opportunity to increase annual revenues $100,000 by selling to a new, riskier group of customers. The bad debt expense is expected to be 15% of revenues (on these additional sales only) and collection costs will be 5% of revenues (on these additional sales only). The company's manufacturing and selling expenses are 70% of revenues on all sales and its effective tax rate is 40%. If Lyman should accept this opportunity, the company will increase its after-tax profits by