ACCY 2036 Exam 3


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I need a solution to question D on CVP analysis. anyway you guys can help? 9 pages Exam3.S11.Sample.9,10,12(1) (1).doc Name______________________________ Student ID#_______________________ Lab Section_________________________ Lab Instructor: ACCY 2036 Exam 3: Sample Questions Matching (2 points each) PB&J Corporation manufactures peanut butter and jelly sandwiches for children’s parties. Match the following items with their appropriate classification and record the letter in the blank. (You may use a classification more than once or not at all.) ______1. ______2. ______3. ______4. ______5. ______6. ______7. Peanut butter, jelly, bread Depreciation of factory Advertising Factory supervisor Plastic gloves worn by jelly spreader Person who spreads jelly Director of marketing A. B. C. D. E. Direct materials Indirect materials Direct labor Indirect labor No match Matching (1 point each) Now match the following and record the letter in the blank. (You may use a classification more than once or not at all.) ______1. Sandwiches with only peanut butter on them so far A. Raw materials inventory ______2. Sandwiches ready to be sold C. D. ______3. Peanut butter left in jar E. Finished goods inventory Does not belong in any manufacturing (product) inventory No match ______4. Plastic gloves to be worn by jelly spreader ______5. Office supplies 1 CVP (12 points). Cost-Volume Profit Analysis. Sit On It manufactures sofas and loveseats. The sales mix is 2 sofas for every 1 loveseat sold. Total fixed costs per year are $44,000. Selling prices and variable costs are as follows: Product Sofa Loveseat Selling price per item $300 $250 Variable cost per item $200 $175 SHOW YOUR WORK! A. What is the contribution margin per “unit”? (2 points) $________________ B. How many sofas, and loveseats must be sold in a year in order for Sit On It to breakeven? (3 points) _________________ Sofas _________________ Loveseats C. Last year, Sit On It sold a total of 200 “units”. If the company’s income tax rate was 35%, what was the after-tax income for the year? (3 points) $________________ D. If Sit On It has a target AFTER-TAX income of $13,000 for the year, what dollar sales volume must be reached to achieve that target? (4 points) $_________________ 2 PART 2. CVP analysis (25 points) Whine and Cheesy Excuses (WCE) sells three types of whine and excuses: Lightweight, Effective, and Over-the-Top. The product mix is 2 Lightweight, 3 Effective, and 5 Over-the-Top. Fixed costs total $3,225. The selling prices and variable costs of these categories of whine and excuses are as follows: Sales (units) Sales revenue Variable costs Lightweight 4,000 $40,000 $16,000 Effective 6,000 $90,000 $66,000 Over-the-Top 10,000 $140,000 $80,000 Selling price per product Variable cost per product $10.00 $4.00 $15.00 $11.00 $14.00 $8.00 Total 20,000 $270,000 $162,000 Required: (1) What is the contribution margin per “unit” of sales mix? $____________ (2) What is the contribution margin percentage? _____________% (3) Sales are currently $11,340. (a) How many Lightweight whines/excuses were sold? _____________ Lightweight whines/excuses (b) How many Over-the-Top whines/excuses were sold? _____________ Over-the-Top whines/excuses (c) What is the current pretax income? $____________ (4) Assume the income tax rate is 40%, how many Effective whines/excuses must WCE sell to earn an after-tax profit (net income) of $4,545? _____________ Effective whines/excuses 3 PART 3. Matching (11 points) Bud’s Spuds manufactures flavored potato chips. Match the following items with their appropriate classification and record the match on the blank line. (You may use a classification more than once or not at all.) 16080. _____Factory supervisor 16081. _____Potatoes 16082. _____Potato slicer (a person) 16083. _____Utilities used in factory building 16084. _____Plastic gloves worn by factory workers 16085. _____Sales manager’s salary A. B. C. . Direct materials Dire

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