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  • Submitted By: tijid71
  • Date Submitted: 04/16/2010 1:34 AM
  • Category: Biographies
  • Words: 2274
  • Page: 10
  • Views: 1199

18.Pool Company's variable expenses are 36% of sales. Pool is contemplating an advertising campaign that will cost $20,000. If sales increase by $80,000, the company's net operating income should increase by:

a. [pic]a.
$28,800.
b. [pic]b.
$64,000.
c. [pic]c.
$ 8,800.
d. [pic]d.
$31,200.
19.Street Company's fixed expenses total $150,000, its variable expense ratio is 60% and its variable expenses are $4.50 per unit. Based on this information, the break-even point in units is:

a. [pic]a.
50,000.
b. [pic]b.
37,500.
c. [pic]c.
33,333.
d. [pic]d.
100,000.

Rothe Company manufactures and sells a single product that it sells for $90 per unit and has a contribution margin ratio of 35%. The company's fixed expenses are $46,800. If Rothe desires a monthly target net operating income equal to 15% of sales, sales will have to be (rounded):

a. [pic]a.
1,486 units.
b. [pic]b.
3,467 units.
c. [pic]c.
1,040 units.
d. [pic]d.
2,600 units.
If sales volume increases and all other factors remain constant, then the:

a. [pic]a.
contribution margin ratio will increase.
b. [pic]b.
break-even point will decrease.
c. [pic]c.
margin of safety will increase.
d. [pic]d.
net operating income will decrease.

Rider Company sells a single product. The product has a selling price of $40 per unit and variable expenses of $15 per unit. The company's fixed expenses total $30,000 per year. The company's break-even point in terms of total dollar sales is:

a. [pic]a.
$100,000.
b. [pic]b.
$80,000.
c. [pic]c.
$60,000.
d. [pic]d.
$48,000.
Last year, Flynn Company reported a profit of $70,000 when sales totaled $520,000 and the contribution margin ratio was 40%. If fixed expenses increase by $10,000 next year, what will sales have to be for the company to earn a profit of...