ACCT 505 WEEK 8: FINAL EXAM GUIDE

ACCT 505 WEEK 8: FINAL EXAM GUIDE 1. (TCO E) Complying with regulations is a(n) (Points : 5) batch-level activity. product-level activity. unit-level activity. organization sustaining activity. 2. (TCO G) Given the following data, what would ROI be? Sales $90,000 Net operating income $18,000 Contribution margin $40,000 Average operating assets $100,000 Stockholder's equity $250,000 (Points : 5) 7.2% 20.0% 18.0% 44.4% Page 2 1. (TCO C) Madlem, Inc., produces and sells a single product whose selling price is $120.00 per unit and whose variable expense is $46.20 per unit. The company's fixed expense is $405,900 per month. Required: Determine the monthly breakeven in either unit or total dollar sales. Show your work! (Points : 25) Monthly Break Even Unit = Fixed Cost/(Sale Price - Variable Cost per unit) Monthly Break Even Unit = 405,900/(120-46.20) Monthly Break Even Unit = 5,500 Units Monthly Break Even in total dollar sales = Fixed Cost/contribution margin ratio Contribution margin ratio = (Sale Price - Variable Cost per unit)/Sale Contribution margin ratio = (120-46.20)/120