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University Of Arizona ATMO 005 Quiz 9 1)The Benson Company recently sold 150 units and had total sales of $4,200

Accounting

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University Of Arizona

ATMO 005

Quiz 9

1)The Benson Company recently sold 150 units and had total sales of $4,200. During the same time the company reported variable costs per unit of $15 and net income of $300. If the company's price per unit were increased by 25 percent and its volume decreased by 20 units, what would be the company's projected net income?

 

2. A sales budget does not include predicted sales prices of inventory.

predicted inventory purchase prices.

predicted unit sales.

a sales budget includes

all of the above.

 

3. What amount would be the beginning cash amount on a Q2 cash budget for your virtual business in Marketplace (the class team)?

 

 

4. The Ruess Company began operations on January 1st when its owners invested $50,000. The following information was available at the end of January: Cost of Goods Sold $28,800, Accounts receivable $2,300, Accounts payable $6,000, Cash $12,500, Inventory $40,800, Notes payable

$80,000, Revenue $36,000, Utilities expense $400, Wage expense $9,800 and Dividends $2,200. What is the company’s net income for the month?

 

 

5. A company wants to know the cost of inventory that was sold during the current period. Which financial statement should the company refer to?

Balance Sheet

 Income Statement

Statement of Results

Statement of Retained Earnings

 

 

6. The Bridges Company purchases toy musical instruments from a supplier for $15 each and then sells them to its customers for $25 each. The company forecasted unit sales of

February              100

March   200

April       150

Ending inventory for January was 20 units and the company wants budgeted ending inventory to be 20% of the following month’s forecasted sales after that. What dollar amount would the company report for cost of goods sold in its budgeted income statement for March?

2,850     3,000     (200 units x $15 cost)

3,150     5,000

2,250

 

7. Cost classifications based on how costs behave based on changes in usage or volume determines whether costs are

product or period selling or administrative

variable or fixed

contribution or overhead general or specific

 

 

 

8. Break-even point is achieved when sales price equals variable cost per unit.

total contribution margin equals fixed costs.

total sales equals total variable costs.

total variable costs equals total fixed costs.

 

 

 

Ezra, Inc. sells biodegradable water bottles. The company has predicted the following sales for the first four months of the current year:

 

 

 

Month  Units

 

 

 

 

 

 

January 8,000

 

 

 

February              12,000

 

 

 

 

 

 

March   9,000

 

 

 

 

 

 

April       7,000

 

 

9. Ending inventory at December 31st is 2,000 units and for each month after that is expected to be 10% of the next month's sales. What amount of purchases (in units) is planned for March?

 

 

 

10. Which of the following would be reported as a cash outflow from an investing activity on a cash budget?

Sale of inventory

Purchase of equipment

Payment of a long-term loan Purchase of inventory

Sale of equipment