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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