Question

7. Assume the following information:    Amount Per Unit Sales $ 300,000 $ 40 Variable expenses...

7.

Assume the following information:
  

Amount Per Unit
Sales $ 300,000 $ 40
Variable expenses 112,500 15
Contribution margin 187,500 $ 25
Fixed expenses 38,000
Net operating income $ 149,500

  
The dollar sales to break-even is:

Multiple Choice

  • $149,500.

  • $101,333.

  • $47,500.

  • $60,800.

12.

Assume the sales budget for April and May is 46,000 units and 48,000 units, respectively. The production budget for the same two months is 43,000 units and 44,000 units, respectively. Each unit of finished goods required 4 pounds of raw materials. The company always maintains raw materials inventory equal to 25% of the following month's production needs. How many pounds of raw material need to be purchased in April?

Multiple Choice

  • 172,500

  • 175,000

  • 176,900

  • 173,000

Business   Accounting   
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Homework Answers

Answer #1

Answer 7: $60800

Calculation of Above Answer:

Break-even Dollar Sales = (Fixed Expenses/Contribution Per unit)*Selling Price per unit

= ($38000/$25)*40

= $60800

Answer 12. $173000

Calculation of Above Answer

Raw Material to Be Purchased = Raw material required for April + 25% of Raw material required for May - Opening Raw material (25% of April R/M retained in march)

= (43000*4) + [(44000*4)*25%] - [(43000*4)*25%]

= $172000 + $44000 - $43000

= $173000

Hope this meets your purpose. Do let me know in case of any clarification.

Do like the answer if it was helpful. Best of Luck...!!

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