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Category: Homework
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Experience:  Post Graduate Diploma in Management (MBA)
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# 1) Monster Corporation is a single product firm that expects

### Customer Question

1) Monster Corporation is a single product firm that expects the following operating results next year:
In total      per unit
Sales…………………\$228,000     \$0.80
Variable expenses……\$172,800    \$0.48
Fixed expenses………. \$72,000    \$0.20
Every unit that Biskra sells next year after the break-even point will increase net operating income by:
2) If a company is operating at the break-even point:
a. its contribution margin will be equal to its variable expenses.
b. its margin of safety will be equal to zero.
c. its fixed expenses will be equal to its variable expenses.
d. its selling price will be equal to its variable expense per unit.

3) Maxy Corporation produces and sells a single product. Data concerning that product appear below:
Selling price per unit=\$130.00
Variable expense per unit=\$41.60
Fixed expense per month=\$109,616

The break-even in monthly dollar sales is closest to:

4) Data concerning Barnebou Corporation's single product appear below:

Selling price per unit=\$150.00
Variable expense per unit=\$34.50
Fixed expense per month=\$466,620

The break-even in monthly unit sales is closest to:

5) Hollyway Corporation has supplied the following data:

Sales period=1,000 units
Selling price=\$50 per unit
Variable manufacturing cost=\$20 per unit
Selling expenses=\$10,000 plus 5% of sales
Administration expenses=\$5,000 plus 15% of sales
The total contribution margin per period is:

6) Data concerning Bedwell Enterprises Corporation's single product appear below:

Selling price per unit= \$160.00
Variable expense per unit=\$65.60
Fixed expense per month=\$387,040

The unit sales to attain the company's monthly target profit of \$17,000 is closest to:
7) Break-even analysis assumes that:
a. Total revenue is constant.
b. Unit variable expense is constant.
c. Unit fixed expense is constant.
d. Selling prices must fall in order to generate more revenue.
8) At the break-even point:
a. sales would be equal to contribution margin
b. contribution margin would be equal to fixed expenses.
d. sales would be equal to fixed expenses.
c. contribution margin would be equal to net operating income.
9) The margin of safety can be calculated by:
a. Sales--(Fixed expenses/Contribution margin ratio).
b. Sales--(Fixed expenses/Variable expense per unit).
c. Sales--(Fixed expenses + Variable expenses).
d. Sales--Net operating income.
10) The following is Noble Company's contribution format income statement last month:
Sales (12,000 units) = \$600,000
Variable expenses=375,000
Contribution margin=225,000
Fixed expenses=150,000
Net operating income=75,000

What is the company's margin of safety percentage to the nearest whole percent?

11) Leonardo Inc. produces and sells a single product. The company has provided its contribution format income statement for June.
Sales (8,800 units) = \$528,000
Variable expenses=290,400
Contribution margin=237,600
Fixed expenses=211,700
Net operating income=25,900

If the company sells 9,200 units, its net operating income should be closest to:

12) Nilk Inc.'s contribution margin ratio is 58% and its fixed monthly expenses are \$36,000. Assuming that the fixed monthly expenses do not change, what is the best estimate of the company's net operating income in a month when sales are \$103,000?
13) A cement manufacturer has supplied the following data:
Tons of cement produced and sold=680,000
Sales revenue=\$2,788,000
Variable manufacturing expense= \$1,156,000
Fixed manufacturing expense=\$760,000
Net operating income=\$306,000

The company's contribution margin ratio is closest to:
14) Chow Corporation produces and sells a single product. Data concerning that product appear below:
Per unit      Percent of sale
Selling price=               \$170            100%
Variable expense=          \$68             40%
Contribution margin=     \$102           60%

Fixed expenses are \$521,000 per month. The company is currently selling 7,000 units per month. Management is considering using a new component that would increase the unit variable cost by \$6. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 500 units. What should be the overall effect on the company's monthly net operating income of this change?
15) If both the fixed and variable expenses associated with a product decrease, what will be the effect on the contribution margin ratio and the break-even point, respectively?
Contribution margin ratio    Break even point
a)decrease             increase
b)increase             decrease
c)decrease             decrease
d)increase             increase

16) Sunny Inc., a company that produces and sells a single product, has provided its contribution format income statement for January.
Sales (4,200 units) = \$155,400
Variable expenses=100,800
Contribution margin=54,600
Fixed expenses=42,400
Net operating income=\$12,200

If the company sells 4,600 units, its total contribution margin should be closest to:
17) Desperado Corporation has provided its contribution format income statement for June. The company produces and sells a single product.
Sales (8,400 units) = \$764,400
Variable expenses=445,200
Contribution margin=319,200
Fixed expenses=250,900
Net operating income=\$68,300

If the company sells 8,200 units, its total contribution margin should be closest to:

18) The contribution margin ratio of Mountain Corporation's only product is 52%. The company's monthly fixed expense is \$296,400 and the company's monthly target profit is \$7,000. The dollar sales to attain that target profit is closest to:
19) Data concerning Pellegren Corporation's single product appear below:
Per unit      Percent of sale
Selling price=               \$200            100%
Variable expense=          \$40             20%
Contribution margin=     \$160          80%

Fixed expenses are \$531,000 per month. The company is currently selling 4,000 units per month. The marketing manager would like to cut the selling price by \$14 and increase the advertising budget by     \$35,000 per month. The marketing manager predicts that these two changes would increase monthly sales by 500 units. What should be the overall effect on the company's monthly net operating income of this change?
20) Ensley Corporation has provided the following data concerning its only product:
Selling price=\$200 per unit
Current sales=30,300 units
Break even sales= 21,816 units

The margin of safety as a percentage of sales is closest to:
21) Hollyway Corporation has supplied the following data:

Sales per period=1,000 units
Selling price=\$50 per unit
Variable manufacturing cost=\$20 per unit
Selling expense=\$10,000 plus 5% of sales
Administration expense=\$5,000 plus 15% of sales

If the selling price is changed to \$55 per unit, the break-even point will be (round to nearest unit):
22) A company makes a single product that it sells for \$16 per unit. Fixed costs are \$76,800 per month and the product has a contribution margin ratio of 40%. If the company's actual sales are \$224,000, its margin of safety is:
23) Cubie Corporation has provided the following data concerning its only product:
Selling price=\$100 per unit
Current sales=10,600 units
Break-even sales=9,540 units

What is the margin of safety in dollars?
24) Data concerning Morendo Corporation's single product appear below:
Per unit      Percent of sale
Selling price=               \$160            100%
Variable expense=          \$48             30%
Contribution margin=     \$112          70%

Fixed expenses are \$87,000 per month. The company is currently selling 1,000 units per month. Management is considering using a new component that would increase the unit variable cost by \$28. Since the new component would increase the features of the company's product, the marketing manager predicts that monthly sales would increase by 400 units. What should be the overall effect on the company's monthly net operating income of this change?
25) Contribution margin can be defined as:
a. the amount of sales revenue necessary to cover variable expenses.
b. sales revenue minus fixed expenses.
c. the amount of sales revenue necessary to cover fixed and variable expenses.
d. sales revenue minus variable expenses.
Submitted: 6 years ago.
Category: Homework
Expert:  Linda_us replied 6 years ago.

Hi Mathew

I answered your questions in previous post. If the link is not working I can post again.

If you want some other experts to answer its ok. Presently the question is open to all the experts.

Regards

Linda

Customer: replied 6 years ago.
i couldnt open it. it says bad request when i click the link ...i also want to see your feed back...but i cant see any feed back about you....if you are not so sure about the answers you can let someone else do it..if you are sure you can keep it. if you make all of them right i will give bonus.
Expert:  Linda_us replied 6 years ago.

Hi Mathew

I am sure of the answers.

Once you check all the answer only then accept. I would be happy only when you are satisfied.

Regards

Linda

Linda_us, Finance, Accounts & Homework Tutor
Category: Homework
Satisfied Customers: 7291
Experience: Post Graduate Diploma in Management (MBA)
Customer: replied 6 years ago.
for question 24 and 21 there is no answer like that. check it again and if you cant do it let someone else do it...
Expert:  Linda_us replied 6 years ago.
Question 21

If the amount is given in dollars the it would be 39473.5 or 39500(approx)

Question 24

Its should be increase by 5600 and not 6600

Sorry for the typo for 24

Let me know if you got the correct answer now.

Regards

Linda

Customer: replied 6 years ago.
no answer like that for 21
Expert:  Linda_us replied 6 years ago.

Hi

I figured out the issue it should be 625 Units.

Regards

Linda

Expert:  Manal Elkhoshkhany replied 6 years ago.

You need to spend \$3 to view this post. Add Funds to your account and buy credits.
Expert:  Manal Elkhoshkhany replied 6 years ago.

I just noticed that you had originally requested me to answer your questions and I thank you for your trust, but for future posts, it is better to type "For BusinessTutor" at the beginning of the post, but if you choose to do that, please try to allow me at least 48 hours before the deadline and you will be sure I will get back to you on time

Regards,

Expert:  Manal Elkhoshkhany replied 6 years ago.

Hello again Mathew

Did you need any clarification on this?

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