Reference no: EM132550756
Questions -
Q1. Forms, Inc. wants to sell a sufficient quantity of products to earn an after-tax profit of $40,000. If the unit sales price is $10, unit variable cost is $8, and total fixed costs are $80,000, how many units must be sold to earn income of $40,000? Forms, Inc. has a tax rate of 40%.
a. 40,000 units
b. 90,000 units
c. 73,334 units
d. 18,334 units
Q2. Estes Company sells two types of computer chips. The sales mix is 30% (Chip A) and 70% (Chip B). Chip A has variable costs per unit of $20 and a selling price of $40. Chip B has variable costs per unit of $25 and a selling price of $55. The weighted-average unit contribution margin for Estes is
a. $25.00
b. $23.00
c. $27.00
d. $50.50
Q3. York Ltd. reported a loss of $10,000 for the year. During the year, accounts receivable decreased $3,000, inventory increased $5,000, accounts payable increased by $11,000, and depreciation expense of $6,000 was recorded. Using the indirect method, operating activities
a. used net cash of $23,000.
b. provided net cash of $5,000.
c. used net cash of $17,000.
d. provided net cash of $15,000.
Q4. Net income reported for the current year was $200,000. Depreciation expense was $35,000. During the year, Accounts Receivable and Inventory increased $18,000 and $26,000, respectively. Prepaid Expenses and Accounts Payable decreased $4,000 and $9,000, respectively. There was also a loss on the sale of equipment of $6,000. Using the indirect method, how much cash was provided by operating activities?
a. $210,000
b. $244,000
c. $192,000
d. $182,000
Q5. A successful grocery store would probably have
a. a low inventory turnover.
b. a high inventory turnover.
c. zero profit margin
d. low volume.
Q6. Handles Corp. reported net credit sales of $6,500,000 and cost of goods sold of $3,400,000 for the year. The Accounts Receivable balances at the beginning and end of the year were $525,000 and $575,000, respectively. The receivables turnover ratio was
a. 5.9 times
b. 6.2 times
c. 11.3 times
d. 11.8 times