61. Hartman Co. has fixed costs of $36,000 and a contribution margin ratio of 24%. If expected sales are $200,000, what is the margin of safety as a percentage of sales?
A. 6%
B. 25%
C. 33%
D. 50%
E. 75%
62. A product sells for $200 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 pretax income, how many units must be sold?
A. 6,500
B. 6,000
C. 500
D. 5,000
E. 5,500
63. A product sells for $210 per unit, and its variable costs per unit are $130. The fixed costs are $420,000. If the firm wants to earn $35,000 after tax income (assume a 30% tax rate), how many units must be sold?
A. 6,500
B. 6,275
C. 500
D. 5,875
E. 5,500
64. Management anticipates fixed costs of $72,500 and variable costs equal to 40% of sales. What will pretax income equal if sales are $325,000?
A. $57,500
B. $122,500
C. $130,000
D. $181,250
E. $252,500
65. Conan Company has total fixed costs of $112,000. Its product sells for $35 per unit and variable costs amount to $25 per unit. Next year Conan Company wishes to earn a pretax income that equals 10% of fixed costs. How many units must be sold to achieve this target income level?
A. 1,120
B. 8,214
C. 11,200
D. 12,320
E. 14,080
66. Mueller Corp. manufactures compact discs that sell for $5. Fixed costs are $28,000 and variable costs are $3.60 per unit. Mueller can buy a newer production machine that will increase fixed costs by $8,000 per year but will decrease variable costs by $0.40 per unit. What effect would the purchase of the new machine have on Mueller's break-even point in units?
A. 4,444 unit increase.
B. 9,850 unit decrease.
C. 5,714 unit increase.
D. 4,444 unit decrease.
E. No effect on the break-even point in units.
67. Schmidt Inc, manufactures inexpensive cameras that sell for $50. Fixed costs are $720,000 and variable costs are $30.00 per unit. Schmidt can buy a newer production machine that will increase fixed costs by $14,400 per year but will increase variable costs by 10% per unit. What are the original and the new break-even points in this situation?
A. Original $43,200; New $36,720.
B. Original $36,000; New $36,720.
C. Original $36,000; New $42,353.
D. Original $36,000; New $43,200.
E. Original $24,000; New $41,506.
68. Ivan Company has a goal of earning $70,000 after-tax income. Ivan would need to pay $20,000 of income taxes at the target level of income. The contribution margin ratio is 30%. What amount of dollar sales must be achieved to reach the goal if fixed costs are $36,000?
A. $23,333
B. $36,000
C. $300,000
D. $353,333
E. $420,000
69. Use the following information to determine the margin of safety in dollars:
Unit sales
|
50,000
|
units
|
Dollar sales
|
$500,000
|
|
Fixed costs
|
$204,000
|
|
Variable costs
|
$187,500
|
|
A. $88,500
B. $108,500
C. $173,600
D. $326,400
E. $500,000
70. A company wishes to earn a pretax income equal to 35% of total fixed costs. Its product sells for $50.75 per unit. Total fixed costs equal $156,800 and variable costs per unit are $32.50. How many units must this company sell to meet its goal? (Round answer to complete units.)
A. 11,599
B. 8,592
C. 4,171
D. 6,513
E. 11,047