Question

9. Wimpy Inc. produces and sells a single product. The selling price of the product is...

9. Wimpy Inc. produces and sells a single product. The selling price of the product is $190.00 per unit and its variable cost is $60.80 per unit. The fixed expense is $394,128 per month. The break-even in monthly dollar sales is closest to: (Round your intermediate calculations to 2 decimal places.)

Multiple Choice

$1,231,650

$837,522

$579,600

$394,128

10. Majid Corporation sells a product for $180 per unit. The product's current sales are 42,000 units and its break-even sales are 34,410 units.

What is the margin of safety in dollars?

Multiple Choice

  • $5,074,492

  • $7,560,000

  • $6,193,800

  • $1,366,200

11.Mcdale Inc. produces and sells two products. Data concerning those products for the most recent month appear below:

Product I49V Product Z50U
Sales $ 35,000 $ 40,000
Variable expenses $ 12,300 $ 28,200

The fixed expenses of the entire company were $39,110. The break-even point for the entire company is closest to:

Multiple Choice

  • $79,610

  • $85,022

  • $39,110

12. A cement manufacturer has supplied the following data:

Tons of cement produced and sold 270,000
Sales revenue $ 974,000
Variable manufacturing expense $ 231,000
Fixed manufacturing expense $ 310,000
Variable selling and administrative expense $ 158,600
Fixed selling and administrative expense $ 92,000
Net operating income $ 182,400

The company's contribution margin ratio is closest to:

Multiple Choice

  • 44.5%

  • 60.0%

  • 68.2%

  • 18.7%

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Homework Answers

Answer #1

Answers

1.)579,600

2) $1,366,200

3) $85,022

4) 60.0%

1) Breakeven sales Dollars = Fixed Cost / CM ratio

CM Ratio = ( 190-60.80)/190 = 68%

Break Even sales = 394,128/68% = 579,600 (Answer)

2) margin of Safety = Selling Price *( Actula units -BEP Units )

= 180*(42000-34,410) = $1,366,200

3) Break Even Point for Entire Company = Fixed cost / CM Ratio

Total Sales = 35000+40000= 75,000

Total Variable Cost = 12,300+28,200 = 40,500

Contribution MArgin = 75,000-40,500 = 29,500

CM Ratio = 34,500/75,000 =46%

BEP Sales in Daollars = 39,100 /46% = $85,022 (Answer)

4) Cm ratio = Contibution MArgin / Sales Reveune

total Varaible cost = 231,000+158,600 = 389,600

Contribution MArgin = 974,00-389600 = 584,400

CM Ratio = 584,400/974,000= 60.0%

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