Exam 7: Job Costing Systems

Solen Company's break-even-point in sales is £900,000, and its variable expenses are 75% of sales. If the company lost £32,000 last year, sales must have amounted to

Newham Textiles manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for £7.50 each, and the variable expense was £2.25 per unit. The company needed to sell 20,000 shirts to break even. The net operating income last year was £8,400. Donnelly's expectations for the coming year include the following: * The selling price of the T-shirts will be £9.00. * Variable expenses will increase by one third. * Fixed expenses will increase by 10 selling price -The number of T-shirts the company must sell to break even in the coming year is:

If sales volume increases and all other factors remain constant, then the:

The following graph shows, in a picture form, marginal cost and break-even information about the production and sale of a single product. A ? B ? C 500 units - the current sales this year D 300 units E 100 units - the forecast sales next year F ? G £300,000 H £100,000 From the information given about the graph above calculate the following: The selling price per unit The variable cost per unit The contribution per unit The break-even point in units The margin of safety in units at the present level of sales The margin of safety in units at the forecast level of sales In view of the likely deterioration of sales for next year give some ideas as to what management could do about the situation (other than launch a new product). In view of the forecast reduction in sales Cajan Ham have decided to launch a new product. The product would be made separately from the present product. The forecast financial details are as follows: Selling price £25 Variable cost £15 Annual Fixed costs £1,000,000 Forecast sales £2,000,000 Required a. Calculate the break-even point in number of units sold. b. Calculate the break-even point in £'s of sales. c. What unit level of sales would Cajam Ham have to achieve to enable them to achieve a profit of £150,000? d. What limitations are there to the break-even analysis you have just carried out?

The break-even point can be calculated with the following formula: Total fixed expenses/(Variable expense per unit  Selling price per unit)

The Herald Company manufactures and sells a single product that sells for £50 per unit and has a contribution margin ratio of 30%. The company's monthly fixed expenses are £25,000. If Herald desires a monthly target net operating income equal to 20% of sales pounds, sales in units will have to be (rounded)

Incremental analysis is an analytical approach that focuses only on those items of revenue and cost that will change as a result of a decision

Southampton Electronics manufactures a range of portable heaters. Most of the output is exported. Sales. 12,000 units Selling price. £25 per unit Contribution margin ratio. 40\% Margin of safety percentage. 30\% - The variable expense per unit is:

Everton Furniture Company produces two kinds of chairs: an oak model and a chestnut wood model. The oak model sells for £60 and the chestnut wood model sells for £100. The variable expenses are as follows: - Expected sales in units next year are: 5,000 oak chairs and 1,000 chestnut chairs. Fixed expenses are budgeted at £135,000 per year. The company's overall contribution margin ratio for the expected sales mix is:

Rider Company sells a single product. The product has a selling price of £40 per unit and variable expenses of £15 per unit. The company's fixed expenses total £30,000 per year. The company's break-even point in terms of total pound sales is

The following information pertains to Mete Co. Mete's break-even point in sales pounds is Sales. £400,000 Variable expenses. 80,000 Fixed expenses 20,000

Long Company's variable expenses are 60% of sales. A £1,200 increase in the company's fixed expenses will increase the break-even point in sales by £3,000

The European Electronics Company has 3 divisions. The following budgeted data is available. German Italian Sweden Sales 2,500 units 2,500 units 2,500 units Selling price £ 80 per unit £85 per unit £ 90 per unit Variable expense £ 35 per unit £ 40 per unit £ 38 per unit Fixed expense £ 37,500 £ 40,000 £ 50,000 - Italian Division: If the sales volume decreases by 25%, the variable expense per unit increases by 15%, and all other data remain as in the budget, net operating income will be:

The break-even point in units is calculated using

German Division: If the sales volume decreases by 25%, the variable expense per unit increases by 15%, and all other data remain as in the budget, net operating income will be:

Mark Company currently sells a video recorder with a selling price of £300 per unit. The variable expense per unit is £175 and fixed expenses are £100,000. If the company reduces variable expenses by £20 per unit and increases the fixed expenses by £10,000, the break-even point will increase

Sweden Division: If the unit contribution margin is increased by 10%, the total fixed expense is decreased by 20%, and all other data remain as in the budget, net operating income will be:

Newham Textiles manufactures and sells T-shirts imprinted with college names and slogans. Last year, the shirts sold for £7.50 each, and the variable expense was £2.25 per unit. The company needed to sell 20,000 shirts to break even. The net operating income last year was £8,400. Donnelly's expectations for the coming year include the following: * The selling price of the T-shirts will be £9.00. * Variable expenses will increase by one third. * Fixed expenses will increase by 10 selling price -needed next year to maintain the same contribution margin ratio as last year is

On a CVP graph for a profitable company, the total revenue line will be steeper than the total expense line.

Southampton Electronics manufactures a range of portable heaters. Most of the output is exported. Sales. 12,000 units Selling price. £25 per unit Contribution margin ratio. 40\% Margin of safety percentage. 30\% - The break-even level in sales pounds is: