Note: Please put your name & ID# on the exam & answer sheet. Provide all your an

Question

Note: Please put your name & ID# on the exam & answer sheet. Provide all your answers on th and return it along with the exam after completion. 25. Canseco Company shows the following income statement as of Dec 31, 2011. Canseco Company Income Statement Year Ended December 31, 2011 (in thousands) 300,000 Revenues Cost of goods sold: Beginning fnished goods, Jan. 1, 2011 Cost of goods manufactured Cost of goods available for sale Ending finished goods, Dec. 31, 2011 s 18,000 23,000 Cost of goods sold Gross margin Operating costs: 169,000 Marketing, distribution, and customer-senvice costs General and administrative costs 93,000 29,000 Total operating costs 122,000 Operating income/(loss) S 47,000 What is the amount of Cost of Goods Manufactured for the Year Ended Dec 31, 2011 (in thousands)? A) $169,000 B) $108,000 C) $136,000 D) $90,000 26. How many units would have to be sold to yield a target operating income of $44,000, assuming variable costs are $30 per unit, total fixed costs are $4,000, and the unit selling price is $40? A) 4,400 units B) 4,800 units C) 96,000 units D) 400 units

Explanation / Answer

25.

and we know that Revenues - COGS = Gross Margin

Therefore COGS = 300,000 - 169,000 = 131,000

131,000 - 18,000 + 23,000

   = $136,000

Option C is correct.

26. We know that

Sales p.u - Variable cost p.u = contribution p.u

therefore, $40 - $30 = $10 p.u

= $44,000 + $4,000

= $48,000

contribution p.u ?= $10 p.u

So, no. of units to be sold = $48,000/$10

= 4,800 units

Option B is correct.   

Cost of goods sold = opening inventory + goods manufactured - closing inventory

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