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Green Companys variable expenses are 75% of sales. At a sales

Resolved Question:

Green Company's variable expenses are 75% of sales. At a sales level of $400,000, the company's degree of operating leverage is 8. At this sales level, fixed expenses are

A. $87,500.
B. $100,000.
C. $75,000.
D. $50,000.
Submitted: 3 years ago.
Category: Homework
Expert:  Neo replied 3 years ago.
Good day!

The answer is A. $87,500.

Please do not forget to click the Accept button.

Thank you so much! :)
Customer: replied 3 years ago.
2. Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations, 100,000 units were produced, and 90,000 units were sold. Manufacturing costs and selling and administrative expenses for the year were as follows:

 

Fixed Costs

Variable Costs

Raw materials

$1.75 per unit produced

Direct labor

$1.25 per unit produced
Factory overhead $100,000$0.50 per unit produced
Selling and administrative$70,000$0.60 per unit
sold

 

What was Indiana Corporation's net operating income for the year using variable costing?

A. $281,000
B. $371,000
C. $271,000
D. $181,000

 

 

3. Murdoch Corporation has provided the following data concerning its only product:

 

Murdoch Product Data

Selling price$230 per unit
Current sales39,100 units
Break-even sales29,716 units

 

What is the margin of safety in dollars?

A. $8,993,000
B. $6,834,680
C. $5,995,333
D. $2,158,320

 

Use the following information to answer this question.

Harris Company produces a single product. Last year, Harris manufactured 17,000 units and sold 13,000 units. Production costs for the year were as follows:

 

Production Cost Data

Direct materials$153,000
Direct labor $110,500
Variable manufacturing overhead $204,000

Fixed manufacturing overhead

$255,000

 

Sales were $780,000 for the year, variable selling and administrative expenses were $88,400, and fixed selling and administrative expenses were $170,000. There was no beginning inventory. Assume that direct labor is a variable cost.

Under variable costing, the company's net operating income for the year would be _______ than under absorption costing.

A. $60,000 higher
B. $60,000 lower
C. $108,000 higher
D. $108,000 lower

 

5. Witczak Company has a single product and currently has a degree of operating leverage of 5. Which of the following will increase Witczak's degree of operating leverage?

An increase in
variable expenses

A)Yes
B) No
C) Yes
D) No

An increase in
fixed expenses

Yes
Yes
No
No


A. Choice A
B. Choice B
C. Choice C
D. Choice D

 

 

6. Use the following information to answer this question.

Callaham Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $115.80 per unit.

 

Sales volume (units)

4,000

5,000

Cost of sales

$338,000$422,500

Selling and administrative costs

$89,600$106,000

 

The best estimate of the total variable cost per unit is

A. $105.70.
B. $100.90.
C. $84.50.
D. $106.90.

 

7. Use the following information to answer this question.

Callaham Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $115.80 per unit.

 

Sales volume (units)

4,000

5,000

Cost of sales

$338,000$422,500

Selling and administrative costs

$89,600$106,000

 

The best estimate of the total contribution margin when 4,300 units are sold is

A. $134,590.
B. $64,070.
C. $43,430.
D. $38,270.

 

8. Use the following information to answer this question.

Gargymal Company would like to estimate the variable and fixed components of its electrical costs and has compiled the following data for the past five months of operations.

 

Machine Hours

Electrical Cost

August

1,000$1,620

September

900$1,510
October 1,500$1,870
November 2,000$1,950
December1,300$1,730

 

Using the high-low method of analysis, the estimated variable cost per machine hour for electricity is closest to which of the following?

A. $0.40
B. $1.68
C. $2.50
D. $0.98

 

9. Use the following information to answer this question.

Lifsey Wedding Fantasy Company makes very elaborate wedding cakes to order. The owner of the company has provided the following data concerning the activity rates in its activity-based costing system:

Activity Cost PoolsActivity Rate
Size-related$0.94 per guest
Complexity-related$31.62 per tier
Order-related$55.70 per order
  • The measure of activity for the size-related activity cost pool is the number of planned guests at the wedding reception. The greater the number of guests, the larger the cake.
  • The measure of complexity is the number of tiers in the cake.
  • The activity measure for the order-related cost pool is the number of orders. (Each wedding involves one order.)
  • The activity rates include the costs of raw ingredients, such as flour, sugar, eggs, and shortening. The activity rates don't include the costs of purchased decorations, such as miniature statues and wedding bells, which are accounted for separately.

 

Data concerning two recent orders are listed here:

 

Pyburn WeddingSmith Wedding
Number of reception guests72189
Number of tiers on the cake45
Cost of purchased decorations for cake$29.92$68.75

 

Assuming that the company charges $556.96 for the Smith wedding cake, what would be the overall margin on the order?

A. $152.45
B. $165.41
C. $96.66
D. $460.30

 

10. Slosh Cleaning Corporation services both residential and commercial customers. Slosh expects the following operating results next year for each type of customer:

 

Operating Results

Residential

Commercial

Sales

$60,000$140,000

Contribution margin ratio

50%30%

 

Slosh expects to have $18,000 in fixed expenses next year. What would Slosh's total dollar sales have to be next year to generate a profit of $90,000?

A. $270,000
B. $300,000
C. $216,000
D. $250,000

 

11. Viren Corporation has provided the following data from its activity-based costing system:

 

Activity Cost Pool Total CostTotal Activity
Assembly $387,000250,000 machine-hours
Processing orders$68,5101,700 orders
Inspection$128,1171,930 inspection-hours

 

The company makes 240 units of product T91H a year, requiring a total of 550 machine hours, 90 orders, and 40 inspection hours per year. The product's direct materials cost is $16.98 per unit, and its direct labor cost is $12.09 per unit. According to the activity-based costing system, the average cost of product T91H is closest to _______ per unit.

A. $29.07
B. $90.81
C. $75.70
D. $79.66

 

 

12. At a break-even point of 400 units sold, variable expenses were $4,000, and fixed expenses were $2,000. What will the 401st unit sold contribute to profit?
A. $0
B. $5
C. $10
D. $15

13. An increase in the activity level within the relevant range results in a/an
A. unchanged fixed cost per unit.
B. proportionate increase in total fixed costs.
C. increase in fixed cost per unit.
D. decrease in fixed cost per unit.

 

14. Mardist Corporation has sales of $100,000, variable expenses of $75,000, fixed expenses of $30,000, and a net loss of $5,000. How much would Mardist have to sell to achieve a profit of 10% of sales?
A. $225,500
B. $180,000
C. $200,000
D. $187,500

 

15. Bear Publishing sells a nature guide. The following information was reported for a typical month (sales volume is constant each month):

 

Total

Per Unit

Sales

$17,600$16.00

Variable expenses

$9,680$8.80
Contribution margin$7,920$7.20
Fixed expenses$3,600
Net operating income$4,320

 

Bear is expecting a 20-cent increase in variable expenses. No other changes are expected or planned. How much contribution margin should Bear expect after the increase?

A. Can't be determined
B. $4,100
C. $7,700
D. $9,900

 

 

Question 16 of 20 : Select the best answer for the question.
Mark for review (Will be highlighted on the review page)
16. Use the following information to answer this question.

Callaham Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $115.80 per unit.

 

Sales volume (units)

4,000

5,000

Cost of sales

$338,000$422,500

Selling and administrative costs

$89,600$106,000

 

The best estimate of the total monthly fixed cost is

A. $24,000.
B. $528,500.
C. $427,600.
D. $478,050.
17. Rank the following methods of assigning overhead costs from least accurate to most accurate.
A. Plantwide rate, activity-based costing, departmental rates
B. Departmental rates, plantwide rate, activity-based costing
C. Plantwide rate, departmental rates, activity-based costing
D. Activity-based costing, departmental rates, plantwide rate

 

 

18. Use the following information to answer this question.

Gargymal Company would like to estimate the variable and fixed components of its electrical costs and has compiled the following data for the past five months of operations.

 

Machine Hours

Electrical Cost

August

1,000$1,620

September

900$1,510
October 1,500$1,870
November 2,000$1,950
December1,300$1,730

 

Using the high-low method of analysis, the estimated fixed cost per month for electricity is closest to which of the following?

A. $1,306.50
B. $870.00
C. $1,150.00
D. $1,290.00

 

 

19. A company increased the selling price for its product from $5 to $6 per unit when total fixed expenses increased from $100,000 to $200,000 and variable expense per unit remained unchanged. How would these changes affect the break-even point?
A. The effect can't be determined from the information given.
B. The break-even point in units would increase.
C. The break-even point in units would remain unchanged.
D. The break-even point in units would decrease.

 

20. Use the following information to answer this question.

Harris Company produces a single product. Last year, Harris manufactured 17,000 units and sold 13,000 units. Production costs for the year were as follows:

 

Production Cost Data

Direct materials$153,000
Direct labor $110,500
Variable manufacturing overhead $204,000

Fixed manufacturing overhead

$255,000

 

Sales were $780,000 for the year, variable selling and administrative expenses were $88,400, and fixed selling and administrative expenses were $170,000. There was no beginning inventory. Assume that direct labor is a variable cost.

The contribution margin per unit was

A. $17.50.
B. $32.50.
C. $27.30.
D. $25.70.

 

 

 

Thank youThan2

=

Customer: replied 3 years ago.
Indiana Corporation produces a single product that it sells for $9 per unit. During the first year of operations, 100,000 units were produced, and 90,000 units were sold. Manufacturing costs and selling and administrative expenses for the year were as follows:

 

Fixed Costs

Variable Costs

Raw materials

$1.75 per unit produced

Direct labor

$1.25 per unit produced
Factory overhead $100,000$0.50 per unit produced
Selling and administrative$70,000$0.60 per unit
sold

 

What was Indiana Corporation's net operating income for the year using variable costing?

A. $281,000
B. $371,000
C. $271,000
D. $181,000

 

 

3. Murdoch Corporation has provided the following data concerning its only product:

 

Murdoch Product Data

Selling price$230 per unit
Current sales39,100 units
Break-even sales29,716 units

What is the margin of safety in dollars?

A. $8,993,000
B. $6,834,680
C. $5,995,333
D. $2,158,320

 

Use the following information to answer this question.

Harris Company produces a single product. Last year, Harris manufactured 17,000 units and sold 13,000 units. Production costs for the year were as follows:

 

Production Cost Data

Direct materials$153,000
Direct labor $110,500
Variable manufacturing overhead $204,000

Fixed manufacturing overhead

$255,000

 

Sales were $780,000 for the year, variable selling and administrative expenses were $88,400, and fixed selling and administrative expenses were $170,000. There was no beginning inventory. Assume that direct labor is a variable cost.

Under variable costing, the company's net operating income for the year would be _______ than under absorption costing.

A. $60,000 higher
B. $60,000 lower
C. $108,000 higher
D. $108,000 lower

 

5. Witczak Company has a single product and currently has a degree of operating leverage of 5. Which of the following will increase Witczak's degree of operating leverage?

An increase in
variable expenses

A)Yes
B) No
C) Yes
D) No

An increase in
fixed expenses

Yes
Yes
No
No


A. Choice A
B. Choice B
C. Choice C
D. Choice D

 

 

6. Use the following information to answer this question.

Callaham Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $115.80 per unit.

 

Sales volume (units)

4,000

5,000

Cost of sales

$338,000$422,500

Selling and administrative costs

$89,600$106,000

 

The best estimate of the total variable cost per unit is

A. $105.70.
B. $100.90.
C. $84.50.
D. $106.90.

 

7. Use the following information to answer this question.

Callaham Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $115.80 per unit.

 

Sales volume (units)

4,000

5,000

Cost of sales

$338,000$422,500

Selling and administrative costs

$89,600$106,000

 

The best estimate of the total contribution margin when 4,300 units are sold is

A. $134,590.
B. $64,070.
C. $43,430.
D. $38,270.

 

8. Use the following information to answer this question.

Gargymal Company would like to estimate the variable and fixed components of its electrical costs and has compiled the following data for the past five months of operations.

 

Machine Hours

Electrical Cost

August

1,000$1,620

September

900$1,510
October 1,500$1,870
November 2,000$1,950
December1,300$1,730

 

Using the high-low method of analysis, the estimated variable cost per machine hour for electricity is closest to which of the following?

A. $0.40
B. $1.68
C. $2.50
D. $0.98

 

9. Use the following information to answer this question.

Lifsey Wedding Fantasy Company makes very elaborate wedding cakes to order. The owner of the company has provided the following data concerning the activity rates in its activity-based costing system:

Activity Cost PoolsActivity Rate
Size-related$0.94 per guest
Complexity-related$31.62 per tier
Order-related$55.70 per order
  • The measure of activity for the size-related activity cost pool is the number of planned guests at the wedding reception. The greater the number of guests, the larger the cake.
  • The measure of complexity is the number of tiers in the cake.
  • The activity measure for the order-related cost pool is the number of orders. (Each wedding involves one order.)
  • The activity rates include the costs of raw ingredients, such as flour, sugar, eggs, and shortening. The activity rates don't include the costs of purchased decorations, such as miniature statues and wedding bells, which are accounted for separately.

 

Data concerning two recent orders are listed here:

 

Pyburn WeddingSmith Wedding
Number of reception guests72189
Number of tiers on the cake45
Cost of purchased decorations for cake$29.92$68.75

 

Assuming that the company charges $556.96 for the Smith wedding cake, what would be the overall margin on the order?

A. $152.45
B. $165.41
C. $96.66
D. $460.30

 

10. Slosh Cleaning Corporation services both residential and commercial customers. Slosh expects the following operating results next year for each type of customer:

 

Operating Results

Residential

Commercial

Sales

$60,000$140,000

Contribution margin ratio

50%30%

 

Slosh expects to have $18,000 in fixed expenses next year. What would Slosh's total dollar sales have to be next year to generate a profit of $90,000?

A. $270,000
B. $300,000
C. $216,000
D. $250,000

 

11. Viren Corporation has provided the following data from its activity-based costing system:

 

Activity Cost Pool Total CostTotal Activity
Assembly $387,000250,000 machine-hours
Processing orders$68,5101,700 orders
Inspection$128,1171,930 inspection-hours

 

The company makes 240 units of product T91H a year, requiring a total of 550 machine hours, 90 orders, and 40 inspection hours per year. The product's direct materials cost is $16.98 per unit, and its direct labor cost is $12.09 per unit. According to the activity-based costing system, the average cost of product T91H is closest to _______ per unit.

A. $29.07
B. $90.81
C. $75.70
D. $79.66

 

 

12. At a break-even point of 400 units sold, variable expenses were $4,000, and fixed expenses were $2,000. What will the 401st unit sold contribute to profit?
A. $0
B. $5
C. $10
D. $15

13. An increase in the activity level within the relevant range results in a/an
A. unchanged fixed cost per unit.
B. proportionate increase in total fixed costs.
C. increase in fixed cost per unit.
D. decrease in fixed cost per unit.

 

14. Mardist Corporation has sales of $100,000, variable expenses of $75,000, fixed expenses of $30,000, and a net loss of $5,000. How much would Mardist have to sell to achieve a profit of 10% of sales?
A. $225,500
B. $180,000
C. $200,000
D. $187,500

 

15. Bear Publishing sells a nature guide. The following information was reported for a typical month (sales volume is constant each month):

 

Total

Per Unit

Sales

$17,600$16.00

Variable expenses

$9,680$8.80
Contribution margin$7,920$7.20
Fixed expenses$3,600
Net operating income$4,320

 

Bear is expecting a 20-cent increase in variable expenses. No other changes are expected or planned. How much contribution margin should Bear expect after the increase?

A. Can't be determined
B. $4,100
C. $7,700
D. $9,900

 

 

Question 16 of 20 : Select the best answer for the question.
Mark for review (Will be highlighted on the review page)
16. Use the following information to answer this question.

Callaham Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $115.80 per unit.

 

Sales volume (units)

4,000

5,000

Cost of sales

$338,000$422,500

Selling and administrative costs

$89,600$106,000

 

The best estimate of the total monthly fixed cost is

A. $24,000.
B. $528,500.
C. $427,600.
D. $478,050.
17. Rank the following methods of assigning overhead costs from least accurate to most accurate.
A. Plantwide rate, activity-based costing, departmental rates
B. Departmental rates, plantwide rate, activity-based costing
C. Plantwide rate, departmental rates, activity-based costing
D. Activity-based costing, departmental rates, plantwide rate

 

 

18. Use the following information to answer this question.

Gargymal Company would like to estimate the variable and fixed components of its electrical costs and has compiled the following data for the past five months of operations.

 

Machine Hours

Electrical Cost

August

1,000$1,620

September

900$1,510
October 1,500$1,870
November 2,000$1,950
December1,300$1,730

 

Using the high-low method of analysis, the estimated fixed cost per month for electricity is closest to which of the following?

A. $1,306.50
B. $870.00
C. $1,150.00
D. $1,290.00

 

 

19. A company increased the selling price for its product from $5 to $6 per unit when total fixed expenses increased from $100,000 to $200,000 and variable expense per unit remained unchanged. How would these changes affect the break-even point?
A. The effect can't be determined from the information given.
B. The break-even point in units would increase.
C. The break-even point in units would remain unchanged.
D. The break-even point in units would decrease.

 

20. Use the following information to answer this question.

Harris Company produces a single product. Last year, Harris manufactured 17,000 units and sold 13,000 units. Production costs for the year were as follows:

 

Production Cost Data

Direct materials$153,000
Direct labor $110,500
Variable manufacturing overhead $204,000

Fixed manufacturing overhead

$255,000

 

Sales were $780,000 for the year, variable selling and administrative expenses were $88,400, and fixed selling and administrative expenses were $170,000. There was no beginning inventory. Assume that direct labor is a variable cost.

The contribution margin per unit was

A. $17.50.
B. $32.50.
C. $27.30.
D. $25.70.

 

 

 

Thank youThan2

=

Expert:  Neo replied 3 years ago.
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Category: Homework
Satisfied Customers: 12076
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Expert:  Neo replied 3 years ago.
Thank you so much! :)

By the way, can I have the title, edition and name of the authors of your book?
Customer: replied 3 years ago.

Ill dont have it here with me. I will get it for you tomorrow.

 

Expert:  Neo replied 3 years ago.
Ok. Thank you so much! :)

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