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    How many units were sold in the period?

    Which correctly describes the amount of dividend?

    What will the club's Income and Expenditure account show?

    What is the maximum dividend per share payable from this year's profits?

    When a shareholder sells some shares for less than he paid for them, what will happen to the share capital of the company?

    What effect will this transaction have on the current and quick (acid test) ratios?

    What is the creditors' payment period?

    A company wishes to improve its current ratio and its acid test ratio. How can this be done?

    What is the effect of this method of allocation?
    What is the fixed cost?What are the variable unit costs?

    I The following information relates to a business for a period.
    $
    selling price per unit
    100
    variable costs per unit
    60
    total fixed costs
    90 000
    net profit
    15 000
    How many units were sold in the period?
    A 1500 B 1750 C 2250 D 2625

    16 A company has an authorised share capital of 2 million $0.25 ordinary shares of which 1.6 million
    are in issue. It is proposed to pay a dividend totalling $40 000.
    Which correctly describes the amount of dividend?
    A an ordinary dividend of 8%
    B an ordinary dividend of 10%
    C an ordinary dividend of $0.08 per share
    D an ordinary dividend of $0.10 per share

    17 The treasurer of a tennis club has provided the following information for a year.
    number of members 75

    annual subscription $95

    subscriptions received $7,305

    overheads: tennis balls - purchased $850

    Opening stock $110
    Closing stock $95

    other overheads $4,700

    What will the club's Income and Expenditure account show?
    A $1560 surplus B $1670 surplus C $1740 surplus D $1850 surplus

    18 A company is financed by:
    10 000 $1 ordinary shares
    $5000 10 % Loan

    Net profit before interest and taxation is $2500.
    Tax payable is $400.
    What is the maximum dividend per share payable from this year's profits?
    A $0.16 B $0.20 C $0.21 D $0.25

    19 When a shareholder sells some shares for less than he paid for them, what will happen to
    the share capital of the company?
    A It will fall by the nominal value of the shares sold.
    B It will fall by the sales proceeds of the shares sold.
    C It will increase by the amount received from the sale of the shares.
    D It will remain the same as before.

    20 A business sells stock to a credit customer at a selling price greater than cost.
    What effect will this transaction have on the current and quick (acid test) ratios?
    A Both ratios will be unchanged.
    B Both ratios will increase.
    C The current ratio will increase while the quick ratio will not change.
    D The current ratio will not change while the quick ratio will increase.

    21 The following items are included in the Balance Sheet of a business.
    $0
    Stock $64

    Debtors $126

    Creditors $87

    Bank (debit balance) $21

    Bank loan (repayable in 2 years) $50

    What is the quick (acid test) ratio?
    A 1.1:1 B 1.2:1 C 1.7:1 0 2.4:1
    22 The following information is available for a business.

    opening stock $29,000

    credit purchases $186,000

    closing stock $8,000

    creditors at year end $24,000

    What is the creditors' payment period?
    A 40 days B 43 days C 48 days D 54 days
    23 The opening stock of a business is $10 000 and the cost of goods sold is $200 000.
    Using the average figure of opening and closing stock, what value of closing stock is needed to give a stock turnover of 10?
    A $10,000 B $20,000 C $30000 D $40,000

    24 A company wishes to improve its current ratio and its acid test ratio.
    How can this be done?
    A increasing discounts to debtors
    B increasing the provision for doubtful debts
    C purchasing additional stock on credit
    D selling fixed assets
    25 A business uses job costing to calculate the cost of vehicle repair jobs.
    Overheads are allocated on an absorption costing basis.
    What is the effect of this method of allocation?
    A overheads will include both fixed and variable overhead costs
    B overheads will include direct costs only
    C overheads will include fixed overhead costs only
    D overheads will include variable overhead costs only
    26 The table shows costs at three activity levels.
    activity levels 65 Units 90 Units 100 Units
    $ $ $
    fixed cost ? ? ?
    Variable Cost ? ? ?
    total Cost 15600 19600 21200

    What is the fixed cost?
    A $1600 B $4000 C $5200 D $5600
    What is the fixed cost?
    A $1600 B $4000 C $5200 D $5600
    27 What will result in under-absorption of fixed production overhead?
    A absorption based on actual expenditure and actual activity
    B actual expenditure below budget expenditure
    C actual activity above budget activity
    D actual activity below budget and expenditure as budgeted

    28 What does the diagram show?

    A Fixed costs per unit are less as production increases.
    B Total fixed costs are less as production increases.
    C Total variable costs are less as production increases.
    D Variable costs per unit are less as production increases.
    29 The information relates to a product.

    Break even Sales revenue $15000
    unit Sales Price $10
    Fixed Cost $6,000

    What are the variable unit costs?
    A $2.00 B $2.50 C $4.00 D $6.00
    30 The table shows opening and closing balances for the Rent Receivable account.
    start of year end of year
    rent received in advance $4,200 $1,600
    rent due in arrears $2,000 $2,400

    During the year, $111 000 rental income was received.
    What is the total rent receivable for the year?
    A $110,600 B $111 000 C $112800 D $114,000

    © BrainMass Inc. brainmass.com December 24, 2021, 4:49 pm ad1c9bdddf
    https://brainmass.com/business/dividends-stock-repurchase-and-policy/many-units-were-sold-period-9734

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    SOLUTION This solution is FREE courtesy of BrainMass!

    See attached file for complete answers.

    I The following information relates to a business for a period.
    $
    selling price per unit
    100
    variable costs per unit
    60
    total fixed costs
    90000
    net profit
    15 000
    How many units were sold in the period?
    A 1500 B 1750 C 2250 D 2625

    selling price per unit 100
    variable costs per unit 60
    Therefore contribution= 40

    total fixed costs 90000
    No of units required to break even= 2250 =90000/40

    Net profit 15000
    No of units required= 375

    Total no of units sold= 2625

    16 A company has an authorised share capital of 2 million $0.25 ordinary shares of which 1.6 million
    are in issue. It is proposed to pay a dividend totalling $40 000.
    Which correctly describes the amount of dividend?
    A an ordinary dividend of 8%
    B an ordinary dividend of 10%
    C an ordinary dividend of $0.08 per share
    D an ordinary dividend of $0.10 per share

    Total no of shares outstanding 1,600,000

    Total dividend $40,000

    Dividend per share= $0.0250

    Par value of share= $0.25

    Dividend per share/ Par value= 10.00%

    17 The treasurer of a tennis club has provided the following information for a year.
    number of members 75

    annual subscription $95

    subscriptions received $7,305

    overheads: tennis balls - purchased $850

    Opening stock $110
    Closing stock $95

    other overheads $4,700

    What will the club's Income and Expenditure account show?
    A $1560 surplus B $1670 surplus C $1740 surplus D $1850 surplus

    subscriptions received $7,305

    overheads: tennis balls - purchased $850
    other overheads $4,700
    $5,550

    Decrease in stock $15
    $5,565

    Surplus= $1,740

    18 A company is financed by:
    10 000 $1 ordinary shares
    $5000 10 % Loan

    Net profit before interest and taxation is $2500.
    Tax payable is $400.
    What is the maximum dividend per share payable from this year's profits?
    A $0.16 B $0.20 C $0.21 D $0.25

    Net profit before interest and taxation is 2,500
    Interest = 500 =10% of 5000
    2,000
    Tax payable= 400
    Amount available for distribution 1,600

    No of shares= 10000

    Max div per share= $0.16

    19 When a shareholder sells some shares for less than he paid for them, what will happen to
    the share capital of the company?
    A It will fall by the nominal value of the shares sold.
    B It will fall by the sales proceeds of the shares sold.
    C It will increase by the amount received from the sale of the shares.
    D It will remain the same as before.

    Mkt transactions of shares have no impact on the share capital of the company

    Current Assets Current liabilities
    20 A business sells stock to a credit customer at a selling price greater than cost.
    What effect will this transaction have on the current and quick (acid test) ratios? Stock 64 Creditors
    A Both ratios will be unchanged.
    B Both ratios will increase. Debtors 126 Bank (debit balance)
    C The current ratio will increase while the quick ratio will not change. 190
    D The current ratio will not change while the quick ratio will increase.

    ATR 1.166666667 =126/108
    CR 1.759259259 =190/108
    See the illustration where stock worth 30 is sold for 35
    Current Assets Current liabilities

    Stock 34 Creditors

    Debtors 161 Bank (debit balance)
    195

    ATR 1.490740741 =161/108
    CR 1.805555556 =195/108

    21 The following items are included in the Balance Sheet of a business.
    $0 Current Assets Current liabilities
    Stock $64
    Stock 64 Creditors 87
    Debtors $126
    Debtors 126 Bank (debit balance) 21
    Creditors $87 190 108

    Bank (debit balance) $21
    Acid test ratio= =126/108=1.1667:1=1.2:1
    Bank loan (repayable in 2 years) $50

    What is the quick (acid test) ratio?
    A 1.1:1 B 1.2:1 C 1.7:1 0 2.4:1

    22 The following information is available for a business.

    opening stock $29,000

    credit purchases $186,000

    closing stock $8,000

    creditors at year end $24,000

    What is the creditors' payment period?
    A 40 days B 43 days C 48 days D 54 days

    Credit purchase per day= $510 =186000/365
    creditors at year end= $24,000
    creditors' payment period= 47.06 =24000/510

    23 The opening stock of a business is $10 000 and the cost of goods sold is $200 000.
    Using the average figure of opening and closing stock, what value of closing stock is needed to give a stock turnover of 10?
    A $10,000 B $20,000 C $30000 D $40,000

    Average stock=200000/10=20000
    opening stock= 10000
    Therefore closing stock= 30000 as (10000+30000)/2=20000

    24 A company wishes to improve its current ratio and its acid test ratio.
    How can this be done?
    A increasing discounts to debtors
    B increasing the provision for doubtful debts
    C purchasing additional stock on credit
    D selling fixed assets as it will increase either cash or debtors

    25 A business uses job costing to calculate the cost of vehicle repair jobs.
    Overheads are allocated on an absorption costing basis.
    What is the effect of this method of allocation?
    A overheads will include both fixed and variable overhead costs
    B overheads will include direct costs only
    C overheads will include fixed overhead costs only
    D overheads will include variable overhead costs only

    26 The table shows costs at three activity levels.
    activity levels 65 Units 90 Units 100 Units
    $ $ $
    fixed cost ? ? ?
    Variable Cost ? ? ?
    total Cost 15600 19600 21200
    160 160

    What is the fixed cost?
    A $1600 B $4000 C $5200 D $5600

    Variable cost=(19600-15600)/(90-65)= 160

    activity levels 65 90 100
    $
    fixed cost 5200 =15600-160*65 5200 5200
    Variable Cost 160 160 160
    total Cost 15600 19600 21200

    27 What will result in under-absorption of fixed production overhead?
    A absorption based on actual expenditure and actual activity
    B actual expenditure below budget expenditure
    C actual activity above budget activity
    D actual activity below budget and expenditure as budgeted

    28 What does the diagram show?

    A Fixed costs per unit are less as production increases.
    B Total fixed costs are less as production increases.
    C Total variable costs are less as production increases.
    D Variable costs per unit are less as production increases.

    29 The information relates to a product.

    Break even Sales revenue $15000
    unit Sales Price $10
    Fixed Cost $6,000

    What are the variable unit costs?
    A $2.00 B $2.50 C $4.00 D $6.00

    Break even Sales revenue $15,000
    unit Sales Price $10

    No of units= 1500

    Fixed cost= 6000

    Contribution per unit= $4 =6000/1500

    Variable unit cost= $6

    30 The table shows opening and closing balances for the Rent Receivable account.
    rent received in advance $4,200 $1,600
    rent due in arrears $2,000 $2,400

    During the year, $111 000 rental income was received.
    What is the total rent receivable for the year?
    A $110,600 B $111 000 C $112800 D $114,000

    opening closing increase
    rent received in advance $4,200 $1,600 ($2,600)
    rent due in arrears $2,000 $2,400 $400

    Rental income received $111,000

    Add increase in rent due in arrears= $400

    Subtract increase in rent received in arraears ($2,600)
    total rent receivable for the year $114,000

    This content was COPIED from BrainMass.com - View the original, and get the already-completed solution here!

    © BrainMass Inc. brainmass.com December 24, 2021, 4:49 pm ad1c9bdddf>
    https://brainmass.com/business/dividends-stock-repurchase-and-policy/many-units-were-sold-period-9734

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