Question 1 Johansson Company developed the following static budget at the beginn

Question

Question 1

Johansson Company developed the following static budget at the beginning of the company's accounting period:

If the actual volume of sales was 9,900 units, the flexible budget would show variable costs of (Do not round intermediate calculations.):

A. $4,750.

B. $19,800

C. $9,500.

D. $4,950.

Question 2

Jamison Company has an investment in assets of $969,000, income that is 10% of sales, and an ROI of 19%. From this information the amount of income would be:

A. $184,110.

B. $87,210.

C. $96,900.

D. $281,010

  Revenue (9,500 units) $19,000   Variable costs 4,750   Contribution margin $14,250   Fixed costs 4,750   Net income $ 9,500

Explanation / Answer

Question 1

Variable cost at 9500 units = $4,750

Variable cost per unit = $0.50 per unit

Total variable cost at 9,900 units will be = $4,950 (D)

Question 2

ROI is provided at 19% and the investment is provided at $969,000

hence income is = 969,000 x 19% = $184,110. (A)

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