Reference no: EM133159477
Question 1 - Assume the Hiking Shoes division of the Simply Shoes Company had the following results last year? (in thousands).? Management's target rate of return is? 10% and the weighted average cost of capital is? 20%. Its effective tax rate is? 30%.
Sales ?$7,000,000
Operating income ?1,400,000
Total assets ?1,000,000
Current liabilities ?790,000
What is the? division's Return on Investment? (ROI)?
A. ?700%
B. ?79%
C. ?140%
D. ?20%
Question 2 - Summer Nights sells bottles of bug spray for? $6.50 each. Variable costs are? $3.25 per? bottle, while fixed costs are? $42,000 per month for volumes up to? 40,000 bottles of spray and? $60,000 per month for volumes above? 40,000 bottles of spray. The flexible budget would reflect monthly operating income for? 20,000 bottles of spray and? 34,000 bottles of spray of what dollar? amounts?
A. ?$88,000 and? $68,500, respectively
B. ?$23,000 and? $68,500, respectively
C. ?$130,000 and? $221,000, respectively
D. ?$5,000 and? $161,000, respectively
Question 3 - Safe Dog Company makes dog crates. The budgeted selling price is? $30 per? crate, the variable rate is? $5 per crate and budgeted fixed costs are? $20,000 per month. What is the budgeted operating income for? 2,900 crates sold in a? month?
A. ?$52,500
B. ?$87,000
C. ?$34,500
D. ?$72,500
Question 4 - Affordable Smiles mobile dentist office budgeted for? 4,320 patient visits a year. Affordable Smiles actually saw? 4,445 patients during the year and they have provided the following? data:
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Fixed Portion for Budget
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Variable Portion per patient visit for Budget
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Actual Results
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Revenue
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?$70
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?$406,700
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Personnel Expenses
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?$60,000
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?$63,000
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Medical Supplies
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?$10
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?$38,200
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Occupancy Expenses
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?$12,000
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?$1.50
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?$19,000
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Admin Expenses
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?$19,000
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?$0.50
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?$20,000
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Based on the given? information, what is the flexible budget variance for personnel? expenses?
A. ?$0
B. ?$3,000 Unfavorable
C. ?$3,000 Favorable
D. Cannot be determined