ACCT 505 Managerial Accounting Practice Final Exam Answers

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C) an unchanged fixed cost per unit. D) a decrease in fixed cost per unit. Use the following to answer Questions 4–5. The following information has been provided by Evans Retail Stores Inc. for the first quarter of the year. Sales $350,000 Variable selling expenses 35,000 Fixed selling expenses 25,000 Cost of goods sold (variable) 160,000 Fixed administrative expenses 55,000 Variable administrative expenses 15,000 4. The gross margin of Evans Retail Stores Inc. for the first quarter is A) $210,000. B) $140,000. C) $220,000. D) $190,000. 5. The contribution margin of Evans Retail Stores Inc. for the first quarter is A) $300,000. B) $140,000. C) $210,000. D) $190,000. 6. The total contribution margin decreases if sales volume remains the same and A) fixed expenses increase. B) fixed expenses decrease. C) variable expense per unit increases. D) variable expense per unit decreases. 7. A company has provided the following data: Sales 3,000 units Sales price $70 per unit Variable cost $50 per unit Fixed cost $25,000 If the sales volume decreases by 25%, the variable cost per unit increases by 15%, and all other factors remain the same, then net operating income will A) decrease by $31,875. B) decrease by $15,000. C) increase by $20,625. D) decrease by $3,125. 8. Wallace Inc. prepared the following budgeted data based on a sales forecast of $6,000,000. VariableFixed Direct materials $1,600,000 Direct labor 1,400,000 Factory overhead 600,000 $ 900,000 Selling expenses 240,000 360,000 Administrative expenses 60,000140,000 Total $3,900,000 $1,400,000
What would be the amount of sales dollars at the break-even point? A) $2,250,000 B) $3,500,000 C) $4,000,000 D) $5,300,000 9. The following information pertains to Rica Company. Sales (50,000 units) $1,000,000 Manufacturing costs: Variable 340,000 Fixed 70,000 Selling and admin. expenses: Variable 10,000 Fixed 60,000 How much is Rica's break-even point in number of units? A) 9,848 B) 10,000 C) 18,571 D) 26,000 Use the following to answer Questions 10–11. Dorian Company produces and sells a single product. The product sells for $60 per unit and has a contribution margin ratio of 40%. The company's monthly fixed expenses are $28,800. 10. The variable expense per unit is A) $31.20. B) $24.00. C) $36.00. D) $28.80. 11. The break-even point in sales dollars is A) $48,000. B) $72,000. C) $28,800. D) $0. 12. An allocated portion of fixed manufacturing overhead is included in product costs under which of the following? Absorption Variable Costingcosting A) No No B) No Yes C) Yes No D) Yes Yes Use the following to answer Questions 13–16. Farron Company, which has only one product, has provided the following data concerning its most recent month of operations. Selling price $92 Units in beginning inventory 0 Units produced 8,700 Units sold 8,300
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Page 5 and 6: C) $171,666. D) $173,400. 18. Avril
Page 7 and 8: 31. Gata Co. plans to discontinue a

ACCT 505 Managerial Accounting Practice Final Exam Answers

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