233) Stanley's Candies is considering building a new plant in Europe. It predicts sales at the new plant to be 40,000 units at $4.00/unit. Below is a listing of estimated expenses:

Category

Total Annual Expenses

% of Annual Expense that are Fixed

Materials

$20,000

10%

Labor

$30,000

20%

Overhead

$50,000

40%

Marketing/Admin

$10,000

60%

A European firm was contracted to sell the product and will receive a commission of 10% of the sales price. No U.S. home office expenses will be allocated to the new facility.

The margin of safety percentage for Stanley's Candies is

A) 50.00%.

B) 86.51%.

C) 150.00%.

D) 14.49%.

234) Stanley's Candies is considering building a new plant in Europe. It predicts sales at the new plant to be 40,000 units at $4.00/unit. Below is a listing of estimated expenses.

Category

Total Annual Expenses

% of Annual Expense that are Fixed

Materials

$20,000

10%

Labor

$30,000

20%

Overhead

$50,000

40%

Marketing/Admin

$10,000

60%

A European firm was contracted to sell the product and will receive a commission of 10% of the sales price. No U.S. home office expenses will be allocated to the new facility.

The contribution margin ratio for Stanley's Candies is:

A) 157.50%.

B) 57.50%.

C) 42.50%.

D) 52.50%.

235) Fancy Furniture has variable expenses of 40% of sales and monthly fixed expenses of $240,000. The monthly target operating income is $60,000. What is the monthly margin of safety in dollars if Fancy Furniture achieves its operating income goal?

A) $100,000

B) $900,000

C) $500,000

D) $(300,000)

236) Fancy Furniture has variable expenses of 40% of sales and monthly fixed expenses of $240,000. The monthly target operating income is $60,000. What is the monthly margin of safety as a percentage of target sales in dollars?

A) 180.00%

B) 25.00%

C) 20.00%

D) 60.00%

237) Fancy Furniture has variable expenses of 40% of sales and monthly fixed expenses of $240,000. The monthly target operating income is $60,000. What is Fancy Furniture's operating leverage factor at the target level of operating income?

A) 0.20

B) 5.00

C) (3.00)

D) 1.25

238) Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000. The monthly target operating income is $3,750. What is the monthly margin of safety in dollars if Yellow Company achieves its operating income goal?

A) $(18,750)

B) $56,250

C) $6,250

D) $31,250

239) Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000. The monthly target operating income is $3,750. What is the monthly margin of safety as a percentage of target sales in dollars?

A) 20.00%

B) 180.00%

C) 60.00%

D) 25.00%

240) Yellow Company's variable expenses are 40% of sales and have monthly fixed expenses of $15,000. The monthly target operating income is $3,750. What is Yellow Company's operating leverage factor at the target level of operating income?

A) 1.25

B) 0.20

C) (3.00)

D) 5.00

241) Neeley Grocery has a monthly target operating income of $25,000. Variable expenses are 20% of sales and monthly fixed expenses are $15,000. What is the monthly margin of safety in dollars if the business achieves its operating income goal?

A) $ 50,000

B) $ 31,250

C) $ 68,750

D) $ 12,500

242) Neeley Grocery has a monthly target operating income of $25,000. Variable expenses are 20% of sales and monthly fixed expenses are $15,000. What is the monthly margin of safety as a percentage of target sales in dollars?

A) 137.50%

B) 62.50%

C) 80.00%

D) 166.67%

243) Neeley Grocery has a monthly target operating income of $25,000. Variable expenses are 20% of sales and monthly fixed expenses are $15,000. What is Neeley Grocery's operating leverage factor at the target level of operating income?

A) 0.63

B) 2.67

C) 0.40

D) 1.60

244) Garfield Corporation is considering building a new plant in Canada. It predicts sales at the new plant to be 50,000 units at $5.00/unit. Below is a listing of estimated expenses:

Category

Total Annual Expenses

% of Annual Expense that are Fixed

Materials

$50,000

10%

Labor

$90,000

20%

Overhead

$40,000

30%

Marketing/Admin

$20,000

50%

A Canadian firm was contracted to sell the product and will receive a commission of 10% of the sales price. No U.S. home office expenses will be allocated to the new facility.

How much does the Canadian contractor expect to make in commissions?

A) $ 25,000

B) $ 75,000

C) $225,000

D) $ 5,000

245) Garfield Corporation is considering building a new plant in Canada. It predicts sales at the new plant to be 50,000 units at $5.00/unit. Below is a listing of estimated expenses:

Category

Total Annual Expenses

% of Annual Expense that are Fixed

Materials

$50,000

10%

Labor

$90,000

20%

Overhead

$40,000

30%

Marketing/Admin

$20,000

50%

A Canadian firm was contracted to sell the product and will receive a commission of 10% of the sales price. No U.S. home office expenses will be allocated to the new facility.

The unit variable cost for Garfield Corporation is

A) $4.50.

B) $3.10.

C) $3.60.

D) $1.40.

246) Garfield Corporation is considering building a new plant in Canada. It predicts sales at the new plant to be 50,000 units at $5.00/unit. Below is a listing of estimated expenses:

Category

Total Annual Expenses

% of Annual Expense that are Fixed

Materials

$50,000

10%

Labor

$90,000

20%

Overhead

$40,000

30%

Marketing/Admin

$20,000

50%

A Canadian firm was contracted to sell the product and will receive a commission of 10% of the sales price. No U.S. home office expenses will be allocated to the new facility.

The margin of safety percentage for Duncan Enterprises is

A) 89.53%.

B) 35.71%.

C) 164.29%.

D) 64.29%.

247) Garfield Corporation is considering building a new plant in Canada. It predicts sales at the new plant to be 50,000 units at $5.00/unit. Below is a listing of estimated expenses.

Category

Total Annual Expenses

% of Annual Expense that are Fixed

Materials

$50,000

10%

Labor

$90,000

20%

Overhead

$40,000

30%

Marketing/Admin

$20,000

50%

A Canadian firm was contracted to sell the product and will receive a commission of 10% of the sales price. No U.S. home office expenses will be allocated to the new facility.

The contribution margin ratio for Garfield Corporation is

A) 28.00%.

B) 38.00%.

C) 172.00%.

D



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