College Acct 2- Chapter 6

Front

Goodman Corporation has sales of 4,000 units at $75 per unit. Variable costs are 40% of the sales price. If total fixed costs are $70,000, what is the degree of operating leverage?

Back

1.64

Front

The break-even point in dollar sales is closest to:

Back

$234,000

Front

Which of the following factors does not influence the calculation of the break-even point?
variable cost per unit,
fixed costs,
price per unit

Back

total revenue

Front

The contribution margin ratio is closest to:

Back

28%

Front

What should be the overall effect on the company's monthly net operating income if fixed expenses are $100,000 per month, the company is currently selling 1,000 units per month, the unit variable cost increases by $28, and monthly sales increase by 500 units?

Back

increase of $14,000

Front

The number of units that must be sold to achieve a target profit of $50,000 is closest to:

Back

11,100 units

Front

At the break-even point:

Back

contribution margin equals total fixed costs.

Front

If the degree of operating leverage is 6, then a one percent change in quantity sold should result in a 6 percent change in:

Back

net operating income.

Front

A soft drink bottler incurred the following factory utility cost: $3,586 for 750 cases bottled and $3,680 for 1,100 cases bottled. Factory utility cost is a mixed cost containing both fixed and variable components. The variable factory utility cost per case bottled is closest to:

Back

$0.27

Front

What will cause the margin of safety to increase? Options: Fixed expenses increase, Sales price per unit decreases and all other factors remain constant, Sales volume decreases and all other factors remain constant, Sales volume increases and all other factors remain constant

Back

Sales volume increases and all other factors remain constant