ACC 179 | Updates in Management Accounting Part 1

Student Activity Sheet Module #23

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: ________________________________________ Date: ________________

Quiz 6 Materials:
Writing Materials and Ballpen

Multiple Choice. Write the letter of the best answer.

________________ 1. Michigan Company sells 10,000 units at $100 per unit. Variable costs are $75
per unit, and fixed costs are $125,000. Determine the contribution margin ratio.
________________ 2. Santana sells a product for $115 per unit. The variable cost is $75 per unit,
while fixed costs are $65,000. Determine the break-even point if the selling price were increased to
$125 per unit.
________________ 3. Versa Inc. sells a product for $100 per unit. The variable cost is $75 per unit,
and fixed costs are $45,000. Determine the break-even point in sales units.
________________ 4. Melton Inc. has sales of $1,750,000, and the break-even point in sales dollars
is $875,000. Determine the company’s margin of safety as a percent of current sales.
________________ 5. Segar Company budgets sales of $3,200,000, fixed costs of $700,000, and
variable costs of $2,240,000. What is the contribution margin ratio for Segar Company?
________________ 6. At the beginning of the period, the Assembly Department budgeted direct
labor of $112,000 and property tax of $12,000 for 7,000 hours of production. The department
actually completed 7,500 hours of production. Determine the budget for the department, assuming
that it uses flexible budgeting.
________________ 7. MyLife Chronicles Inc. projected sales of 240,000 diaries for 2016. The
estimated January 1, 2016, inventory is 19,900 units, and the desired December 31, 2016, inventory
is 18,800 units. What is the budgeted production (in units) for 2016?
________________ 8. Magnolia Candle Inc. budgeted production of 74,200 candles in 2016. Wax is
required to produce a candle. Assume eight ounces (one-half of a pound) of wax is required for
each candle. The estimated January 1, 2016, wax inventory is 2,500 pounds. The desired December
31, 2016, wax inventory is 2,100 pounds. If candle wax costs $4.10 per pound, determine the direct
materials purchases budget for 2016.
________________ 9. MyLife Chronicles Inc. budgeted production of 238,900 diaries in 2016. Each
diary requires assembly. Assume that six minutes are required to assemble each diary. If assembly
labor costs $12.00 per hour, determine the direct labor cost budget for 2016.
________________ 10. Magnolia Candle Inc. pays 10% of its purchases on account in the month of the
purchase and 90% in the month following the purchase. If purchases are budgeted to be $11,900

This document is the property of PHINMA EDUCATION

 ACC 179 | Updates in Management Accounting Part 1
Student Activity Sheet Module #23

Name: _________________________________________________________________ Class number: _______

Section: ____________ Schedule: ________________________________________ Date: ________________

for March and $12,700 for April, what are the budgeted cash payments for purchases on account
for April?

***end of quiz***

This document is the property of PHINMA EDUCATION