Company Can Sell As Many Units of Either Product As It Produces, the Company Should

1.Product A requires 5 machine hours per unit to be produced, Product B requires only 3 machine hours per unit, and the company's productive capacity is limited to 240,000 machine hours. Product A sells for $16 per unit and has variable costs of $6 per unit. Product B sells for $12 per unit and has variable costs of $5 per unit. Assuming the

company can sell as many units of either product as it produces, the company should:

2.Parker Plumbing has received a special one-time order for 1,500 faucets (units) at $5 per unit. Parker currently produces and sells 7,500 units at $6.00 each. This level represents 75% of its capacity. Production costs for these units are $4.50 per unit, which includes $3.00 variable cost and $1.50 fixed cost. To produce the special order, a new machine need to be purchased at a cost of $1,000 with a zero salvage value. The Palos Company expects sales for June, July, and August of $48,000, $54,000, and $44,000, respectively. Experience suggests that 40% of sales are for cash and 60% are on credit. The company collects 50% of its credit sales in the month following sale, 45% in the second month following sale, and 5% are not collected. What are the company's expected cash receipts for August from its current and past sales?Management expects no other changes in costs as a result of the additional production. Should the company accept the special order?

3.The break-even time (BET) method is a variation of the 4.After-tax net income divided by the annual average investment in an investment, is the: 5.The following data concerns a proposed equipment purchase: Cost...... $144,000 Salvage value...... $4,000 Estimated useful life..4years Annual net cahs flow..$46,100 Depreciation method..Straight-line Assuming that net cash flows are received evenly throughout the year, the accounting rate of return is: 6.The rate that yields a net present value of zero for an investment is the: 7. Select cost information for Winfrey Enterprises is as follows: 1,000 units of output Total Cost/Unit Direct material $5,000 $5.00 Utilities expense $1,000 $1.00 Rent expense $4,000 $4.00 5,000 units of output Total Cost/Unit Direct material $25,000 $5.00 Utilities expense $3,750 $0.75 Rent expense $4,000 $0.80 Based on this information: 8.The margin of safety is the excess of: 9. Use the following information to determine the margin of safety in dollars: Unit sales...... 50,000 units Dollr sales...... $500,000 Fixed costs...... $204,000 Variable costs...... $187,000 10.Total contribution margin in dollars divided by pretax income is the: 11.Brown Company's contribution margin ratio is 24%. Total fixed costs are $84,000. What is Brown's break-even point in sales dollars? 12.A company manufactures and sells a product for $120 per unit. The company's fixed costs are $68,760, and its variable costs are $90 per unit. The company's break-even point in units is: 13.Yamaguchi Company's break even point in units is 1,000. The sales price per unit is $10 and variable cost per unit is $7. If the company sells 2,500 units, what will net income be? 14. A firm sells two products, A and B. For every unit of A the firm sells, two units of B are sold. The firm's total fixed costs are $1,612,000. Selling prices and cost information for both products follow: Product Unit Sales price Verible Cost Per Unit A... $20 $8 B... 24 $4 The contribution margin per composite unit is: 15.Wayward Enterprises manufactures and sells three distinct styles of bicycles: the Youth model sells for $300 and has a unit contribution margin of $105; the Adult model sells for $850 and has a unit contribution margin of $450; and the Recreational model sells for $1,000 and has a unit contribution margin of $500. The company's sales mix includes: 5 Youth models; 9 Adult models; and 6 Recreational models. If the firm's annual fixed costs total $6,500,000, calculate the firm's break-even point in sales dollars. 16.The master budget includes: 17.A plan that lists the types and amounts of operating expenses expected that are not included in the selling expenses budget is a: 18. A plan showing the units of goods to be sold and the revenue to be derived from sales, that is the usual starting point in the budgeting process, is called the: 19. Ecology Co. sells a biodegradable product called Dissol and has predicted the following sales for the first four months of the current year: Sales of units Jan.1700 Feb.1900 March 2,100 April1,600 Ending inventory for each month should be 20% of the next month's sales, and the December 31 inventory is consistent with that policy. How many units should be purchased in February? 20. A quantity of merchandise or materials over the minimum needed reduce the risk o2A