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Question
Product A has a sales price of $10 per unit. Based on a 10,000-unit production level, the variable costs are $6 per unit and the fixed costs are $3 per unit. Using a flexible budget for 12,500 units, what is the budgeted operating income from Product A?
A. $12,500
B. $25,000
C. $20,000
D. $30,000
E. $35,000
Answer
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Related questions
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The _______________________________ is computed by dividing a project's after-tax net income by the average amount invested in it.
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A. Sell the units as scrap.
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C. It does not matter because both alternatives have the same result.
D. Neither sell nor rebuild because both alternatives produce a loss. Instead, the company should store the units permanently.
E. Throw the units away.
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Q:
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Q:
Periods
12 Percent 1
8929 2
1.6901 3
2.4018 4
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Q:
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B. It includes the time value of money.
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Q:
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.8264
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Q:
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Q:
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B. To discount all future and past cash flows.
C. To earn a satisfactory return on investment.
D. To reverse past decisions.
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What is the difference between an opportunity cost and a sunk cost?
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B. Yes, because income will increase by $23,000 in total.
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Q:
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3,000
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B. $500 decrease
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Q:
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42
25 A. 15,000 croquet sets.
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Q:
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76 A. Both product A and product B should be processed further.
B. Neither product A nor product B should be processed further.
C. Only product B should be processed further.
D. Only product A should be processed further.
E. A processing further decision cannot be made from the available data.
Q:
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A. Income will decrease by $7 per unit.
B. Income will increase by $7 per unit.
C. Income will increase by $12 per unit.
D. Income will decrease by $12 per unit.
E. Income will increase by $10 per unit.
Q:
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$20 Nonproduction costs
$3 Fixed costs (in total) Overhead
$175,000 Nonproduction
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A. $23
B. $45
C. $27
D. $50
E. $5
Q:
Assume markup percentage equals desired profit divided by total costs. What is the correct calculation to determine the dollar amount of the markup per unit?
A. Total cost times markup percentage.
B. Total cost per unit times markup percentage per unit.
C. Total cost per unit divided by markup percentage per unit.
D. Markup percentage per unit divided by total cost per unit.
E. Markup percentage divided by total cost.
Q:
Capital budgeting decisions are generally based on:
A. Tentative predictions of future outcomes.
B. Perfect predictions of future outcomes.
C. Results from past outcomes only.
D. Results from current outcomes only.
E. Speculation of interest rates and economic performance only.
Q:
If net present values are used to evaluate two investments that have equal costs and equal total cash flows, the one with more cash flows in the early years has the higher net present value.