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Problem 1: When interpreting a CVP graph which of the following is NOT correct?
Select one:
a. The breakeven point is where the total revenue line meets the fixed cost line.
b. When sales are below the breakeven intersection the company incurs a loss.
c. The total revenue line starts at the origin.
d. The anticipated profit or loss at any given level of sales is measured by the vertical distance between the total revenue line and the total expense line.
Problem 2: The Work in Process inventory account of a manufacturing company shows a balance of $2,400 at the end of an accounting period. The job cost sheets of two uncompleted jobs show charges of $400 and $200 for direct materials and charges of $300 and $500 for direct labour. From this information, what predetermined overhead rate, as a percentage of direct labour costs, does the company appear to be using?
a. 80%.
b. 125%.
c. 300%.
d. 240%.
Solve budgeted cash disbursements for November and December (budgeted total sales for January of the coming year equals $202,000).
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