Friday, March 15, 2013

Open Question: Managerial accounting?

13. Rovinsky Corporation, a company that produces and sells a single product, has provided its contribution format income statement for November. Sales (5,700 units).......$319,200 Variable expenses.......$188,100 Contribution margin.....$131,100 Fixed expenses...........$106,500 Net operating income..$24,600 If the company sells 5,300 units, its net operating income should be closest to: Answer A $24,600 B $2,200 C $22,874 D $15,400 14. Data concerning Bazin Corporation's single product appear below: ......................................… Unit........Percent of Sales Selling Price....................$100...........… Variable Expense............$20...............20% Contribution Margin........$80................80% Fixed expenses are $384,000 per month. The company is currently selling 6,000 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $9 per unit. In exchange, the sales staff would accept a decrease in their salaries of $46,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 500 units. What should be the overall effect on the company's monthly net operating income of this change? Answer A increase of $27,500 B decrease of $64,500 C increase of $41,500 D increase of $507,500 15. Sannella Corporation produces and sells a single product. Data concerning that product appear below: ......................................… Unit........Percent of Sales Selling Price....................$220...........… Variable Expense............$66...............30% Contribution Margin........$154..............70% Fixed expenses are $991,000 per month. The company is currently selling 8,000 units per month. The marketing manager would like to introduce sales commissions as an incentive for the sales staff. The marketing manager has proposed a commission of $11 per unit. In exchange, the sales staff would accept a decrease in their salaries of $74,000 per month. (This is the company's savings for the entire sales staff.) The marketing manager predicts that introducing this sales incentive would increase monthly sales by 200 units. What should be the overall effect on the company's monthly net operating income of this change? Answer A increase of $1,246,600 B increase of $14,600 C decrease of $133,400 D increase of $71,800 16. Borich Corporation produces and sells a single product. Data concerning that product appear below: Selling price per unit $150.00 Variable expense per unit $73.50 Fixed expense per month $308,295 The break-even in monthly unit sales is closest to: Answer A 2,055 B 4,030 C 4,194 D 3,426 Thank you!


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