Q1. The following information is from ABC Company's general ledger: Beginning and ending inventories, respectively, for raw materials were $16,000 and $20,000 and for work in process were $40,000 and $44,000. Raw material purchases and direct labor costs incurred were $72,000 each, and manufacturing overhead applied amounted to $40,000. Determine the total cost of goods manufactured during the period.
A. $176,000.
B. $180,000.
C. $184,000.
D. $220,000.
Q2. If variable costs are 35% of sales and sales increase by $50,000 this month because of a special promotion, by how much will contribution margin increase?
A. $17,500. 0.35X50000
B. $25,500.
C. $32,500.
D. $50,000.
Q3. A firm's current products have sales of $100,000 and an average contribution margin ratio of 40%. If the firm add a new product with sales of $40,000 and variable costs of $20,000, the firm's new average contribution margin ration will be:
A. 37.8%.
B. 42.9%.
C. 45.0%.
D. 48.7%.
Q4. If fixed costs were increased by $9,000 and the contribution margin ratio remained at 30 percent, then sales must increase by _________ in order to cover the additional fixed expenses.
A. $27,000 detail?
B. $30,000
C. $33,000
D. $54,000
Q5. Braco has 80,000 shares of $100 par value common stock outstanding, and 20,000 shares in the treasury. The number of additional shares that would be issued in a 5% stock dividend is:
A. 1,000
B. 2,000
C. 4,000 80000x0.5%=4000
D. 5,000
Q5. An item that cost $120 is to be sold for a price that will yield a gross profit ratio of 20%. The selling price should be:
A. $96
B. $144
C. $150?
D. $600
Q6. If the P/E ratio of a company's common stock were 12, and its earnings were $2.50 per common share: c11
A. the market value of the common stock would be $20.83 per share.
B. the market value of the common stock would be $25.00 per share.
C. an increase in earnings of $0.20 per share, with no change in the multiple, would result in a market price increase of $2.40 per share.
D. an increase in earnings of $0.20 per share, with no change in the multiple, would result in a market price increase of $1.67 per share.