Principles Of Accounting-DL 02-ACC 202 Fall I-Medved: DL02 Week 5 Chapter 18 Quiz

Q. No. 1

 

Bloom Company management predicts that it will incur fixed costs of $250,000 and earn pretax income of $350,000 in the next period. Its expected contribution margin ratio is 60%.

 

1. Compute the amount of total dollar sales.

2. Compute the amount of total variable costs.

 

 

Q. No. 2

 

A jeans maker is designing a new line of jeans called the Slims. The jeans will sell for $370 per pair and cost $262.70 per pair in variable costs to make. (Round your answers to 2 decimal places.)

Q. No. 3

 

Blanchard Company manufactures a single product that sells for $250 per unit and whose total variable costs are $200 per unit. The company’s annual fixed costs are $770,000.

 

(1) Prepare a contribution margin income statement for Blanchard Company at the break-even point.Assume the company’s fixed costs increase by $139,000. What amount of sales (in dollars) is needed to break even?

 

 

Q. No. 4

 

Blanchard Company manufactures a single product that sells for $180 per unit and whose total variable costs are $126 per unit. The company targets an annual after-tax income of $1,012,500. The company is subject to a 25% income tax rate. Assume that fixed costs remain at $842,400.

 

 

Q. No. 5

 

Nombre Company management predicts $410,000 of variable costs, $990,000 of fixed costs, and a pretax income of $259,500 in the next period. Management also predicts that the contribution margin per unit will be $51.

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