Question :
81. Poole Products Inc. has the following product information available:
Sales price
: 1295600
81. Poole Products Inc. has the following product information available:
Sales price
$25 per unit
Variable costs
$10 per unit
Fixed costs
$ 36,000
If Poole is in the 40% tax bracket, how many units need to be sold in order to earn an after-tax target profit of $249,000? A. 30,067B. 12,360C. 27,667D. 31,667
82. LeBlanc Manufacturing has the following product information available:
Sales price
$60 per unit
Variable costs
$20 per unit
Fixed costs
$ 50,000
If LeBlanc is in the 30% tax bracket, how many units need to be sold in order to earn an after-tax target profit of $490,000? A. 17,500B. 18,750C. 19,286D. 9,450
83. Blinson Manufacturing has the following product information available:
Sales price
$75 per unit
Variable costs
$25 per unit
Before-tax profit
$180,000
If Blinson has calculated that it needs to sell 20,000 units in order to earn an after-tax target profit of $126,000, what were Blinson’s fixed costs? A. $ 54,000B. $1,180,000C. $ 820,000D. $ 874,000
84. Howard Enterprises has a contribution margin ratio of 65% and fixed costs of $15,000. What would sales have to be in order for Howard to earn an after-tax profit of $50,000? The company is in the 40% tax bracket. A. $ 23,077B. $100,000C. $151,282D. $ 75,000
85. Which of the following is an assumption of CVP analysis? A. Inventory levels increase at a constant rate.B. Costs are linear throughout the relevant range.C. The number of units sold is constant.D. Fixed costs increase as production increases.
86. One of the major assumptions used in CVP analysis is: A. that number of units sold each year remains the same.B. that in a multi-product environment, all products are assumed to be sold in identical proportion to total sales.C. that the tax rate is not known.D. that the sales price of a product will not change as volume changes.
87. Cost structure refers to the relative proportion of: A. variable costs to contribution margin.B. total costs to sales.C. fixed costs to variable costs.D. sales price per unit to variable costs per unit.
88. Operating leverage measures: A. how sensitive profit is to a change in fixed costs.B. how sensitive profit is to a change in sales volume.C. how sensitive profit is to a change in sales price per unit.D. how sensitive profit is to a change in tax rates.
89. Carson Cabana’s Inc. has the following information available regarding last year’s operations:
Sales
$1,500,000
Variable costs
600,000
Contribution margin
900,000
Fixed costs
300,000
Net income
$ 600,000
The company’s operating leverage was: A. 1.5B. .67C. 2.5D. .60
90. Hillary’s Restaurant has the following information available regarding last year’s operations:
Sales
$900,000
Variable costs
300,000
Contribution margin
600,000
Fixed costs
175,000
Net income
$ 425,000
The company’s operating leverage was: A. .71B. 1.50C. 2.12D. 1.41