Question : 148.Yogurt Palace produces two flavors of low-fat frozen yogurt: Blueberry : 1302733

 

 

148.Yogurt Palace produces two flavors of low-fat frozen yogurt: Blueberry and Raspberry. Information regarding the products is summarized for the month of January in the following table:

BlueberryRaspberry

Number of units                                  6,000          2,000

Sales revenue$90,000 $20,000

Fixed costs20,0009,000

Variable costs  36,000  5,000

Profit$34,000 $  6,000

Amount of processing time per unit1.4 hours1.1 hours

Contribution margin per unit$9.00 $7.50

Profit per unit$5.67 $3.00

 

Yogurt Palace determined it will have only 5,950 hours of processing time during March for which it can produce yogurt. Yogurt Palace determines that it should produce a minimum of 1,500 units of each flavor to stay competitive, and that it should produce more raspberry flavored yogurt than blueberry yogurt. How many raspberry yogurt should the company produce in February considering the processing constraint?

A.3,500 units

B.3,850 units

C.5,409 units

D.4,250 units

 

149.Garden Duty produces shovels and rakes. Sales and costs for the most recent year are indicated below:

ShovelsRakesTotal

Units              8,000              20,000              28,000

Sales revenue              $160,000               $40,000               $200,000

Variable costs              98,000              18,000               116,000

Fixed costs                28,000                12,000                 40,000

Profit              $ 34,000               $10,000               $ 44,000

 

The number of units and selling price per unit of both products appears to be stable for the foreseeable future. How much total revenue will Garden Duty have at break-even?

A.$95,238

B.$13,333

C.$146,663

D.$156,000

 

150.Garden Duty produces shovels and rakes. Sales and costs for the most recent year are indicated below:

ShovelsRakesTotal

Units              8,000              20,000              28,000

Sales revenue              $160,000               $40,000               $200,000

Variable costs              98,000              18,000               116,000

Fixed costs                28,000                12,000                 40,000

Profit              $ 34,000               $10,000               $ 44,000

 

The number of units and selling price per unit of both products appears to be stable for the foreseeable future. How much is the weighted average contribution margin per unit?

A.$4.43

B.$1.57

C.$0.42

D.$3.00

151.Experts on Call provides computer repairs on-site and has a contribution margin ratio of 35%, a contribution margin per service call of $15, and fixed costs of $12,000 per month. During March, it made 1,200 service calls. How much will Experts on Call’s profit increase if 200 more service calls are made?

A.$1,000

B.$350

C.$1,050

D.$3,000

 

152. Why is the level of operating leverage important?

A.It affects the change in profit when sales change.

B.It predicts how much cost will be incurred at various levels of activity.

C.It is calculated using regression analysis which uses all available data points.

D.None of these answer choices are correct..

 

153.To which of the following is operating leverage related?

A.Manufacturing costs versus non-manufacturing costs

B.Estimated costs versus actual costs

C.Total revenues versus total costs

D.Fixed costs versus variable costs

 

154.A company with low operating leverage has lower

A.profit margins.

B.variable costs.

C.fixed costs.

D.selling prices.

 

155.Operating leverage is important because it associates changes in sales with changes in

A.profits.

B.contribution margins.

C.total costs.

D.total production costs.

 

156.Which of the following is true for a firm with high operating leverage?

A.It has a relatively high amount of mixed costs.

B.It is generally thought to be riskier than a company with lower operating leverage.

C.It has a zero contribution margin ratio at the break-even point.

D.If sales increase, its profits will increase at a slower rate than a company with lower operating leverage.

 

157.If a company has fixed costs and is operating at a level above the break-even point, what happens to profits when sales increase by 20%?

A.Profits will increase by less than 20%.

B.Profits will increase by 20%.

C.Profits will increase by more than 20%.

D.Profits will decrease by less than 20%.