4. Dybala Corporation produces and sells a single product. Data concerning that

Question

4. Dybala Corporation produces and sells a single product. Data concerning that product appear below: Per Unit $110 Percent of Sales 100% Selling price Variable expenses Contribution margin 544 The company is currently selling 5,000 units per month. Fixed expenses are $173,000 per month. The marketing manager believes that a $6,000 increase in the monthly advertising budget would result in a 170 unit increase in monthly sales What should be the overall effect on the company's monthly net operating income of this change? A. increase of $1,480 B. decrease of $6,000 C. increase of $7,480 D. decrease of $1,480 5 Mutskic Corporation produces and sells Product BetaC. To guard against stockouts, the company requires that 30% of the next month's sales be on hand at the end of each month. Budgeted sales of Product BetaC over the next four months June July August September 60,000 70,000 80,000 90,000 Budgeted sales in units Budgeted production for August would be: A. 83,000 units B. 107,000 units C. 77,000 units D. 80,000 units 6. The master budget process usually begins with the: A. production budget B. operating budget. C. sales budget. D. cash budget. 7. The break-even in units sold will decrease if there is an increase in: A. unit sales volume. B. total fixed expenses. C. unit variable expenses. D. selling price. 8. Which of the following are considered to be product costs under absorption costing? I. Variable manufacturing overhead. II. Fixed manufacturing overhead. III. Selling and administrative expenses. A. I, II, and III 3. I and II . I and III

Explanation / Answer

6)

Ans) C sales budget

7)

D)Selling price

8)

B) i & ii

Variable Costing , FIxed manufacturing overhead,

Dybala Corporation's
Contribution Income Statement 5000 5170 Sales (at $110 per unit) 550000 568700 Variable expenses (at $66 per unit) 330000 341220 Contribution margin 220000 227480 Fixed expenses 173000 179000 Net Operating Income 47000 48480 Differnece 1480 A increase by 1480

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