Reference no: EM132515376

Question 1: If a firm's forecasted sales are $262,000 and its break-even sales are $196,000, the margin of safety in dollars is:

Question 2: Watson Company has monthly fixed costs of $81,000 and a 40% contribution margin ratio. If the company has set a target monthly income of $14,800, what dollar amount of sales must be made to produce the target income?

Question 3: Henderson Co. has fixed costs of $42,000 and a contribution margin ratio of 30%. If expected sales are $250,000, what is the margin of safety as a percent of sales?

Question 4: A product sells for $270 per unit, and its variable costs per unit are $197. Total fixed costs are $434,000. If the firm wants to earn $50,720 pretax income, how many units must be sold?

Question 5: Locus Company has total fixed costs of $119,000. Its product sells for $59 per unit and variable costs amount to $45 per unit. Next year Locus Company wishes to earn a pretax income that equals 35% of fixed costs. How many units must be sold to achieve this target income level?

Question 6:  Raven Company has a target of $70,100 pre-tax income. The contribution margin ratio is 32%. What amount of dollar sales must be achieved to reach the goal if fixed costs are $36,200?

Question 7: Use the following information to determine the break-even point in sales dollars:

Unit sales 54,800 Units

Dollar sales $548,000

Fixed costs $210,000

Variable costs $205,500

Question 8: Use the following information to determine the break-even point in units (rounded to the nearest whole unit):

Unit sales 53,000 Units

Unit selling price $14.65 Unit

variable cost $7.80

Fixed costs$189,000

Question 9: The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year. Compute the number of units that must be sold in order to achieve a target pretax income of $183,500.

Sales (55,000 units) $990,000

Costs:

Direct materials $202,000

Direct labor 240,500

Fixed factory overhead 102,500

Variable factory overhead 150,500

Fixed marketing costs 110,500

Variable marketing costs 50,500 856,500

Pretax income $133,500

Question 10: The budgeted income statement presented below is for Burkett Corporation for the coming fiscal year. Compute the number of units that must be sold in order to achieve a target pretax income of $156,000.

Sales (43,000 units) $989,000

Costs:

Direct materials $216,800

Direct labor 241,800

Fixed factory overhead 109,000

Variable factory overhead 151,800

Fixed marketing costs 111,800

Variable marketing costs 51,800 883,000

Pretax income $106,000