Graytun Co has a production capacity of 280,000 units per annum. The budgeted salesvolume for the next year is 256,000 units and the break even volume is 167,000 units.What is the margin of safety ratio?

1 .Which of the following best describes the term “relevant cash flow”?

A The benefit which would have been obtained from the best alternative foregone B The difference in future operating cash flows resulting from a decision C A future cash flow which cannot be avoided D All cash flows, including financing cash flows, arising from a project

题型: 单选题 提问时间: 2021-08-24

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2 .

A $40,400 B $40,900 C $43,400 D $43,900

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3 .A machine owned by a company has been idle for some months but could now be used on aone year contract which is under consideration. The net book value of the machine is $1,000.If not used on this contract, the machine could be sold now for a net amount of $1,200. Afteruse on the contract, the machine would have no saleable value and the cost of disposing of itin one year’s time would be $800.What is the total relevant cost of the machine to the contract?

A $400 B $800 C $1,200 D $2,000

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4 .Mario operates a small business that makes pizzas and delivers them within a two-mile radius.The variable cost incurred to make and deliver one pizza is $2·15. The average price chargedis $6·50 per pizza, including delivery.Mario estimates the annual fixed costs of his business are $40,000, including salaries of$24,000.What is the breakeven number of pizzas per year for Mario’s business?

A 3,678 B 6,154 C 9,195 D 18,605

题型: 单选题 提问时间: 2021-08-24

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5 .

A 1,385 units B 4,688 units C 8,824 units D 10,000 units

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7 .Benown Co manufactures a single product which has a variable cost of $17 and currently sellsfor $30. The budgeted sales volume is 25,000 units per month and the budgeted fixed costsare $250,000 per month. The divisional manager is considering reducing the price to $27 tostimulate sales. He also wishes to increase the monthly profit by 10%.What volume of sales is required at the new selling price to increase profit by 10%?

A 19,559 B 32,250 C 33,250 D 43,250

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8 .Morava Co produces a product which has a variable cost of $28 and a selling price of $39.Budgeted sales and production volumes for the next month are 18,000 units. Budgeted fixedcosts are $121,000 per month.If Morava wishes to generate a profit of $11,000, how many units must be sold?

A 1,000 B 10,000 C 11,000 D 12,000

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9 .Jim Bowen has been trading for the last six months as a fast food retailer. His averagecontribution sales(C/S) ratio for that period was 33%, on sales of $120,000. His total fixedexpenses were $25,800. He is considering employing an extra member of staff as heanticipates an increase in business. The cost of the new employee will be $18,000 per annum.To stimulate sales, Jim will also reduce his C/S ratio) to 30%.What percentage increase in sales is needed for Jim to earn the same net profit in thenext six months as he earned in the first six months?

A 21·66% B 25·00% C 35·00% D 60·00%

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10 .A company manufactures one product which it sells for $40 per unit. The product has acontribution to sales ratio of 40%. Monthly total fixed costs are $60,000. At the plannedlevel of activity for next month, the company has a margin of safety of $64,000 expressed interms of sales value.What is the planned activity level (in units) for next month?

A 3,100 B 4,100 C 5,350 D 7,750

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