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Chapter 5 Quiz BA 213

Sperberg Corporation's operating leverage is 5.4. If the company's sales increase by 12%, its net operating income should increase by about 51.2%. Dimitrov Corporation produces a single product. If it sells 6,200 units, its net operating income should be closest to $18,000. A cement manufacturer's unit contribution margin is $2.00. The break-even point in sales dollars for the entire company is closest to $73,950.

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Chapter 5 Quiz BA 213

Sperberg Corporation's operating leverage is 5.4. If the company's sales increase by 12%, its net operating income should increase by about 51.2%. Dimitrov Corporation produces a single product. If it sells 6,200 units, its net operating income should be closest to $18,000. A cement manufacturer's unit contribution margin is $2.00. The break-even point in sales dollars for the entire company is closest to $73,950.

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Sperberg Corporation's operating leverage is 5.4. If the company's sales increase by 12%, its net
operating income should increase by about:

12.0%

2.2%

51.2%

64.8%

Dimitrov Corporation, a company that produces and sells a single product, has provided
its contribution format income statement for July.

Sales (6,300 units) $415,800
Variable expenses 289,800
Contribution margin 126,000
Fixed expenses 103,500
Net operating income $ 22,500

If the company sells 6,200 units, its net operating income should be
closest to:

$22,500

$18,000

$21,979

$20,500

The following data pertain to last month's operations:

Selling price $ 35
per
unit
Variable production cost $ 19
per
unit
Fixed production cost $78,000
Variable selling & admin.
expenses
$ 9
per
unit
Fixed selling & admin. expenses $37,000

The break-even point in dollars is: (Do not round intermediate calculations.)

$253,000

$193,000

$156,000

$575,000

A cement manufacturer has supplied the following data:


Tons of cement produced and sold
245,000
Sales revenue $1,078,000
Variable manufacturing expense $424,000
Fixed manufacturing expense $283,000
Variable selling and administrative
expense
$66,000
Fixed selling and administrative expense $223,000
Net operating income $82,000

What is the company's unit contribution margin?

03_14_2012

$2.00

$.42

$2.40

$4.40


Product O66C Product V67G
Sales $28,000 $33,000
Variable expenses $11,600 $23,170
The fixed expenses of the entire company were $39,180. The break-even point in sales dollars for the
entire company is closest to: (Round your intermediate calculations to 2 decimal places and final
answer to the nearest dollar amount.)

$39,180

$73,950

$46,300

$91,116


Mounts Corporation produces and sells two products. In the most recent month, Product I05L
had sales of $22,000 and variable expenses of $10,060. Product P42T had sales of $35,000
and variable expenses of $17,300. And the fixed expenses of the entire company were $45,970. The
break-even point in sales dollars for the entire company is closest to: (Round your
intermediate calculations to 2 decimal places and final answers to the nearest
dollar amount.)

$45,970

$73,330

$88,364

$88,404



Rickers Inc. produces and sells two products. Data concerning those products for the most recent month
appear below:
The following data pertain to Epsom Corporation's operations:

Unit sales 14,200 units
Selling price $50 per unit
Contribution margin ratio 30%
Margin of safety
percentage
20%

The variable expense per unit is: (Do not round intermediate calculations.)

$15.00 per unit

$25.00 per unit

$35.00 per unit

$10.00 per unit

At a sales level of $98,000, Blue Company's contribution margin is $16,000. If the degree
of operating leverage is 5 at a $98,000 sales level, net operating income must equal:

$3,200

$12,800

$16,400

$19,600

The following information relates to Clyde Corporation which produced
and sold 57,000 units last month.

Sales
$1,368,000

Manufacturing costs:
Fixed $210,000
Variable $205,100
Selling and administrative:
Fixed $300,000
Variable $ 45,700

There were no beginning or ending inventories. Production and sales next month are
expected to be 47,000 units. The company's unit contribution margin next month should
be: (Round your intermediate calculations and final answer to 2 decimal places)

$9.38

$19.60

$23.56

$3.80
Darth Company sells three products. Sales and contribution margin ratios for the
three products follow:

Product X Product Y Product Z
Sales in dollars $29,000 $49,000 $109,000
Contribution margin
ratio
54% 49% 24%

Given these data, the contribution margin ratio for the company as a whole would be:
(Round your intermediate calculations to 2 decimal places. Round your answer to
whole percentage.)

35%

52%

42%

it is impossible to determine from the data given.

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