Question :
31. Pennington ProductsPennington Products has two product lines: R-100 and R-200. : 1291623
31. Pennington ProductsPennington Products has two product lines: R-100 and R-200. Revenue and cost information for each of the product lines are as follows:
R-100
R-200
Selling price per unit
$50
$70
Variable costs per unit
20
35
Traceable fixed expenses
$275,000
$350,000
Pennington has common fixed expenses of $380,000 per year. Last year, the company produced and sold 35,000 units of R-100 and 25,000 units of R-200. Refer to the Pennington Products information above. What is the company’s overall net income? A. $1,260,000B. $ 775,000C. $1,300,000D. $ 920,000
32. Fun-Town Amusement CenterFun-Town Amusement Center offers a variety of family entertainment. The amusement center consists of three separate divisions: miniature golf, arcade, and laser tag. The following information in available regarding each of these divisions for the year just ended:
Miniature
Golf
Arcade
Laser Tag
Revenues
$225,000
$500,000
$300,000
Variable expenses
50,000
100,000
75,000
Traceable fixed expenses
30,000
40,000
35,000
Common fixed costs of $60,000 are divided equally among the divisions. Refer to the Fun-Town Amusement Center information above. The segment margin for the miniature golf division is: A. $175,000B. $145,000C. $125,000D. $ 85,000
33. Fun-Town Amusement CenterFun-Town Amusement Center offers a variety of family entertainment. The amusement center consists of three separate divisions: miniature golf, arcade, and laser tag. The following information in available regarding each of these divisions for the year just ended:
Miniature
Golf
Arcade
Laser Tag
Revenues
$225,000
$500,000
$300,000
Variable expenses
50,000
100,000
75,000
Traceable fixed expenses
30,000
40,000
35,000
Common fixed costs of $60,000 are divided equally among the divisions. Refer to the Fun-Town Amusement Center information above. The segment margin for the arcade division is: A. $300,000B. $400,000C. $360,000D. $340,000
34. Fun-Town Amusement CenterFun-Town Amusement Center offers a variety of family entertainment. The amusement center consists of three separate divisions: miniature golf, arcade, and laser tag. The following information in available regarding each of these divisions for the year just ended:
Miniature
Golf
Arcade
Laser Tag
Revenues
$225,000
$500,000
$300,000
Variable expenses
50,000
100,000
75,000
Traceable fixed expenses
30,000
40,000
35,000
Common fixed costs of $60,000 are divided equally among the divisions. Refer to the Fun-Town Amusement Center information above. The segment margin ratio for the laser tag division is: A. 63.33%B. 56.67%C. 75.00%D. 84.44%
35. WSR Inc.WSR Inc. sells a variety of drink and food products including potato chips and sodas. The segmented income statements for these two products are as follows:
Sodas
Chips
Sales
$800,000
$900,000
Variable expenses
200,000
315,000
Contribution margin
600,000
585,000
Traceable fixed expense
120,000
160,000
Segment margin
$480,000
$425,000
WSR’s management is considering a special advertising campaign that will run during a major sporting event. The advertising campaign is expected to cost $30,000 and only one product can be featured. In-house marketing studies show that the campaign could increase sales of the soda division by $200,000 or increase sales of the chips division by $275,000. Refer to the WSR Inc. information above. What will be the overall net effect on the company’s total profits if the advertising focuses on sodas? A. Increase of $170,000B. Increase of $150,000C. Increase of $120,000D. Increase of $200,000
36. WSR Inc.WSR Inc. sells a variety of drink and food products including potato chips and sodas. The segmented income statements for these two products are as follows:
Sodas
Chips
Sales
$800,000
$900,000
Variable expenses
200,000
315,000
Contribution margin
600,000
585,000
Traceable fixed expense
120,000
160,000
Segment margin
$480,000
$425,000
WSR’s management is considering a special advertising campaign that will run during a major sporting event. The advertising campaign is expected to cost $30,000 and only one product can be featured. In-house marketing studies show that the campaign could increase sales of the soda division by $200,000 or increase sales of the chips division by $275,000. Refer to the WSR Inc. information above. What will be the overall net effect on the company’s total profits if the advertising focuses on chips? A. Increase of $148,750B. Increase of $275,000C. Increase of $178,750D. Increase of $245,000
37. WSR Inc.WSR Inc. sells a variety of drink and food products including potato chips and sodas. The segmented income statements for these two products are as follows:
Sodas
Chips
Sales
$800,000
$900,000
Variable expenses
200,000
315,000
Contribution margin
600,000
585,000
Traceable fixed expense
120,000
160,000
Segment margin
$480,000
$425,000
WSR’s management is considering a special advertising campaign that will run during a major sporting event. The advertising campaign is expected to cost $30,000 and only one product can be featured. In-house marketing studies show that the campaign could increase sales of the soda division by $200,000 or increase sales of the chips division by $275,000. Refer to the WSR Inc. information above. Which of the following statements is true regarding which product the advertising campaign should feature? A. Overall company profits will be higher by $45,000 if the campaign features chips rather than soda.B. Overall company profits will be higher by $28,750 if the campaign features chips rather than soda.C. Overall company profits will be higher by $13,750 if the campaign features chips rather than soda.D. Overall company profits will be higher by $26,250 if the campaign features soda rather than chips.
38. The rate of return generated by an investment center’s assets is called: A. residual income.B. economic value added.C. return on investment.D. segment margin ratio.
39. Return on investment (ROI) is calculated by: A. multiplying the margin by the turnover.B. dividing the margin by the turnover.C. dividing the turnover by the margin.D. adding the margin and the turnover.
40. A company has computed that their “margin” is .18. Which of the following statements is the best interpretation of these results? A. $.18 of every $1 invested in assets is net profit.B. $.18 of every $1 made in sales is profit.C. Every $1 invested in assets generates $.18 in sales revenue.D. Every $1 invested in assets generates $.18 of segment margin.
