# Accounting Questions

2) INSTRUCTIONS: Solve the following problems and record the answers in the Answers column.

0. If total direct labor costs are $100,000 for 25,000 units of production, the per-unit direct labor cost is

1-3. Fixed costs for Flag Stamp Co. are $250,000. The selling price per unit is $20.00, and variable costs are $15.00.

1. The break-even sales (units) are

2. The sales units required to yield a target operating income of $350,000 would be

3. The contribution margin ratio is

4. If sales are $560,500, the unit selling price is $20, and the sales at the break-even point are $426,000, the margin of safety as a percent of sales is

5-6. The contribution margin for Williamson Co. is $160,000, and the operating income is $20,000.

5. Williamson's operating leverage is

6. If Williamson's sales increase by 15%, operating income will

7-8. The data for the highest and lowest levels of a firm's production are

as follows:

Units Produced Total Costs

Highest level 11,000 $87,000

Lowest level 4,000 38,000

7. The variable cost per unit is

8. The estimated total cost to produce 8,000 units is

9-10. A firm manufactures two products, X and Y. The fixed costs are

$28,000, and the sales mix is 75% X and 25% Y. The unit selling price

and the unit variable cost for each product are as follows:

Unit Selling Price Unit Variable Cost

X $10 $ 4

Y 30 22

9. The break-even sales (units) for the above sales mix

10. The number of units of Y that would be sold at the break-even point is

#### Solution Preview

2) INSTRUCTIONS: Solve the following problems and record the answers in the Answers column.

For

Answers Scoring

0. If total direct labor costs are $100,000 for 25,000 units of production, the per-unit direct labor cost is

$4.00 per unit

0. ____

1-3. Fixed costs for Flag Stamp Co. are $250,000. The selling price per unit is $20.00, and variable costs are $15.00.

1. The break-even sales (units) are 50,000 units 1. ____

2. The sales units required to yield a target operating income of $350,000 would be 120,000 units

2. ____

3. The contribution margin ratio is 0.25 3. ____

4. If sales are $560,500, the unit selling price is $20, and the sales at ...

#### Solution Summary

This solution is comprised of solution to calculate the per-unit direct labor cost, break-even sales (units), sales units required to yield a target operating income of $350,000, contribution margin ratio, margin of safety as a percent of sales, Williamson's operating leverage, variable cost per unit, estimated total cost to produce 8,000 units, the break-even sales (units) for the above sales mix, and the number of units of Y that would be sold at the break-even point.