1. Fixed costs are $398,000 and the variable costs are 78% of the unit selling p
ID: 2502034 • Letter: 1
Question
1. Fixed costs are $398,000 and the variable costs are 78% of the unit selling price. What is the break-even point in dollars?
a. $1,809,091
b. $510,256
c. $908,256
d. $1,411,091
2. Buster Company reported a net loss of $4,000 for the year ended December 31, 2008. During the year, accounts receivable increased $5,000, merchandise inventory decreased $6,000, accounts payable decreased by $9,000, and depreciation expense of $3,000 was recorded. During 2007, operating activities
a. provided net cash of $7,000.
b. provided net cash of $15,000.
c. used net cash of $15,000.
d, used net cash of $9,000.
Explanation / Answer
Break even point = Fixed costs/ contribution margin
Sales = 100% ; variable cost = 78% so contribution margin = 22%
BEP(dollars) =$398,000/ 22%
= $1,809,091
Option a
2) option d used net cash of $9,000
Net loss ($4,000) Add: Depreciation expense $3,000 inventory decreased $6,000 Less:Accounts payable decreased ($9,000) A/c eeceivable decreased ($5,000) Net cash used -9,000Related Questions
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