Question : 61. Hartman Co. has fixed costs of $36,000 and a : 1256598

 

 

61. Hartman Co. has fixed costs of $36,000 and a contribution margin ratio of 24%. If expected sales are $200,000, what is the margin of safety as a percentage of sales?A.  6%B.  25%C.  33%D.  50%E.  75%

 

 

 

 

 

 

 

 

 

 

62. A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 pretax income, how many units must be sold?A.  6,500B.  6,000C.  500D.  5,000E.  5,500

 

 

63. A product sells for $210 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 after tax income (assume a 30% tax rate), how many units must be sold?A.  6,500B.  6,275C.  500D.  5,875E.  5,500

 

 

 

 

 

 

 

 

 

 

64. Management anticipates fixed costs of $72,500 and variable costs equal to 40% of sales. What will pretax income equal if sales are $325,000?A.  $57,500B.  $122,500C.  $130,000D.  $181,250E.  $252,500

 

 

65. Conan Company has total fixed costs of $112,000. Its product sells for $35 per unit and variable costs amount to $25 per unit. Next year Conan Company wishes to earn a pretax income that equals 10% of fixed costs. How many units must be sold to achieve this target income level?A.  1,120B.  8,214C.  11,200D.  12,320E.  14,080

 

 

 

 

 

 

 

 

 

 

 

 

 

66. Mueller Corp. manufactures compact discs that sell for $5. Fixed costs are $28,000 and variable costs are $3.60 per unit. Mueller can buy a newer production machine that will increase fixed costs by $8,000 per year but will decrease variable costs by $0.40 per unit. What effect would the purchase of the new machine have on Mueller’s break-even point in units?A.  4,444 unit increase.B.  9,850 unit decrease.C.  5,714 unit increase.D.  4,444 unit decrease.E.  No effect on the break-even point in units.

 

 

67. Schmidt Inc, manufactures inexpensive cameras that sell for $50. Fixed costs are $720,000 and variable costs are $30.00 per unit. Schmidt can buy a newer production machine that will increase fixed costs by $14,400 per year but will increase variable costs by 10% per unit. What are the original and the new break-even points in this situation?

A.  Original $43,200; New $36,720.B.  Original $36,000; New $36,720.C.  Original $36,000; New $42,353.D.  Original $36,000; New $43,200.

E.  Original $24,000; New $41,506.

 

 

 

 

68. Ivan Company has a goal of earning $70,000 after-tax income. Ivan would need to pay $20,000 of income taxes at the target level of income. The contribution margin ratio is 30%. What amount of dollar sales must be achieved to reach the goal if fixed costs are $36,000?A.  $23,333B.  $36,000C.  $300,000D.  $353,333E.  $420,000

 

 

69. Use the following information to determine the margin of safety in dollars: 

Unit sales

50,000

units

Dollar sales

$500,000

 

Fixed costs

$204,000

 

Variable costs

$187,500

 

A.  $88,500B.  $108,500C.  $173,600D.  $326,400E.  $500,000

 

 

 

 

 

 

70. A company wishes to earn a pretax income equal to 35% of total fixed costs. Its product sells for $50.75 per unit. Total fixed costs equal $156,800 and variable costs per unit are $32.50. How many units must this company sell to meet its goal?  (Round answer to complete units.)A. 11,599B.  8,592C.  4,171D.  6,513E.  11,047

 

 

 

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