ACC 202 Week 2 Quiz, Questions And Answers

A company has a margin of safety of 25%, a contribution margin ratio of 30%, and sales of $1,000,000.

a. What was the break-even point?
750000

$fill in the blank 1

b. What was the operating income?
75000

$fill in the blank 2

c. If neither the relationship between variable costs and sales nor the amount of fixed costs is expected to change in the next year, how
much additional operating income can be earned by increasing sales by $110,000?
33000

$fill in the blank 3

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Lauder Company had fixed costs of $282,500, variable costs of $645,000, and actual sales amounted to $1,100,000. If the company
has a break-even point at $750,000 in sales revenue.

a. Determine the margin of safety expressed in dollars.
350000

$fill in the blank 1

b. Determine the margin of safety expressed as a percentage of sales. Enter the percentage amount as a whole number (for example,
enter 10% as "10").
32

fill in the blank 2 %

, c. Determine the contribution margin ratio.
41

fill in the blank 3 %

d. Determine the operating income.
172500

$fill in the blank 4

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Tops Company sells Products D and E and has made the following estimates for the coming year:

Product Unit Selling Price Unit Variable Cost Sale Mix
D $30 $24 60%
E 70 56 40

Fixed costs are estimated at $202,400.

a. Determine the estimated sales in units of the overall product necessary to reach the break-even point for the coming year. Round
intermediate calculations to the nearest cent.
22000

fill in the blank 1 units

b. Determine the estimated number of units of each product necessary to be sold to reach the break-even point for the coming year.

13200
Product fill in the blank 2
D units