Multiple Choice Question 121 Sunland Company has fixed costs of $24000 per year.

Question

Multiple Choice Question 121

Sunland Company has fixed costs of $24000 per year. Its warehouse sells wine with variable costs of 70% of its unit selling price. How much in sales does Sunland need to break even per year?

$80000

$20000

$7200

$16800

Multiple Choice Question 36

For Sheridan Company at a sales level of 4000 units, sales is $69000, variable expenses total $50000, and fixed expenses are $21000. What is the contribution margin per unit?

$4.75

$17.25

$5.25

$12.50

Multiple Choice Question 52

For Bonita Industries, sales is $3500000, fixed expenses are $900000, and the contribution margin ratio is 36%. What is required sales in dollars to earn a target net income of $700000?

$2500000

$1944444

$4444444

$9722222

Multiple Choice Question 53

Sheffield Corp. reported sales of $2000000 last year (100000 units at $20 each), when the break-even point was 75000 units. Sheffield’s margin of safety ratio is

25%.

125%.

33%.

75%.

Multiple Choice Question 54

For Vaughn Manufacturing, sales is $1360000 (6800 units), fixed expenses are $480000, and the contribution margin per unit is $100. What is the margin of safety in dollars?

$80000.

$400000.

$760000.

$1160000.

Explanation / Answer

Q 121)
Break even sale = Fixed cost/contribution margin
= $24000/30%
=$80,000

Q 36)
Contribution margin per unit= Contribution/sales unit
= $69000-50000/4000
=4.75

Q 52)
Required sales=Fixed cost + Required income/contribution margin
= 900000+700000/36%
=$44,44,444

Q 53)
Margin of safety % =current sales - break even sale-current sale
= $20,00000-15,00000/20,00000
=25%

Q 54)

MOS in dollar = Actual sales- BEP sale
BEP Sales = fixed cost/contribution margin
$480000/50%=$960000
MOS = $13,60000-$9,60000=
$4,00,000

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