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Exam 2: Cost-Volume-Profit Relationships

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Question 101

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Solen Corporation's break-even-point in sales is $900, 000, and its variable expenses are 75% of sales.If the company lost $32, 000 last year, sales must have amounted to:

A) $868, 000
B) $804, 000
C) $772, 000
D) $628, 000

E) None of the above
F) All of the above

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Question 102

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Grisham Corporation produces and sells a single product.The company has provided its contribution format income statement for February. If the company sells 5, 700 units, its net operating income should be closest to:

A) $20, 400
B) $22, 700
C) $20, 764
D) $26, 800

E) None of the above
F) A) and B)

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Question 103

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The contribution margin ratio of Baginski Corporation's only product is 53%.The company's monthly fixed expense is $617, 980 and the company's monthly target profit is $23, 000.The dollar sales to attain that target profit is closest to:

Data concerning Matsumoto Corporation's single product appear below: Assume the company's target profit is $8, 000.The dollar sales to attain that target profit is closest to:

Gilpatric Corporation produces and sells two products.In the most recent month, Product Q71M had sales of $28, 000 and variable expenses of $7, 840.Product V04P had sales of $49, 000 and variable expenses of $27, 580.The fixed expenses of the entire company were $34, 630. If the sales mix were to shift toward Product Q71M with total sales remaining constant, the overall break-even point for the entire company:

Upchurch Corporation produces and sells a single product.Data concerning that product appear below: Assume the company's target profit is $14, 000.The dollar sales to attain that target profit is closest to:

Data concerning Ulwelling Corporation's single product appear below: Fixed expenses are $753, 000 per month.The company is currently selling 8, 000 units per month. Required: 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 an overall decrease in their salaries of $73, 000 per month.The marketing manager predicts that introducing this sales incentive would increase monthly sales by 300 units.What should be the overall effect on the company's monthly net operating income of this change? Show your work!