Accounting Exam 3

Question 1 (2 points)

If variable costs increase, fixed costs increase, and sales remain the same, what is expected to happen to the Contribution Margin (CM) and to the Break-even Point (BE) respectively?

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Question 2 (3 points)

The break-even point is the point at which

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Question 3 (3 points)

Singer Co. reported sales of $416,000, a contribution margin of $5 per unit, fixed costs of $80,000, and a net income of $24,000. Determine the selling price per unit?

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Question 4 (3 points)

Use the following information to answer questions 4 & 5 
Projected cost information for a new product is as follows:

The product is to be sold at $18 per unit.

Determine the break-even point for this product (in $)

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Question 5 (3 points)

Use the following information to answer questions 4 & 5 
Projected cost information for a new product is as follows:

The product is to be sold at $18 per unit.

What price would the company have to sell this product for if they wish to sell 10,000 units and realize a profit of $50,000?

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Question 6 (3 points)

Gastone Inc. has estimated the following forecasted sales for a 3-month period:

On average, 60% of sales are collected in the month of sale, 39% in the following month, and the remaining 1% is never collected. Determine the budgeted cash receipts for September.

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Question 7 (3 points)