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- + Fit to page ID Page view | APR Mars Company manufactures and sells three products. Relevant per unit data concerning each product are given below. Product A B Selling price $9512815 Variable costs and expenses S3 S10 S12 Machine hours to produce 2 1 2 Instructions Compute the contribution margin per unit of limited resource (machine hours) for each product. (b) Assuming 3,000 additional machine hours are available, which product should be manufactured? (c) Prepare an analysis showing the total contribution margin if the additional hours are (1) divided equally among the products, and (2) allocated entirely to the product identified in (b) above. Desktop/final%20Exam%20MA/Ch6/ch06-solution-manual-accounting-tools-for-business-decision-mak - + Fit to page D Page view A' Read aloud Ans: , LO: 1, Bloom: AP. D uty: Medium, Min: 2. AACSB: Analytic, AICPA BB: Industry Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving/Decision Making. IMA: Business Economics 45. For Sanborn Co., sales is $1,000,000, fixed expenses are $300,000, and the contribution margin per unit is $60. What is the break-even point? a. $1,666,667 sales dollars b. $500,000 sales dollars c. 16,667 units d. 5,000 units Ans:d, LO: 1, Bloom: AP. Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry Sector Perspective, AICPA FN: Measurement, AICPA PC Problem Solving Decision Making. IMA: Business Economics 46. For Franklin, Inc., sales is $2,000,000, fixed expenses are $600,000, and the contribution margin ratio is 36%. What is net income? a. $120,000 b. $216,000 C. $504,000 d. $720,000 Ans: , LO: 1, Bloom: AP, DificultyMedium, Min 2, MACSB: Analytic, AICRA BB: Industry Sector Perspective, AICPA FN: Reporting, AICPA PC Problem Solving Decision Making, IMA: Reporting 47. For Franklin, Inc., sales is $2,000,000, fixed expenses are $600,000, and the contribution margin ratio is 36%. What are the total variable expenses? a. $384.000 b. $720,000 C. $1,280,000 d. $2,000,000 Ans:c, LO: 1, Bloom: AP. Difficulty: Medium, Min: 2, AACSB: Analytic, AICPA BB: Industry Sector Perspective, AICPA FN: Measurement, AICPA PC: Problem Solving Decision Making, IMA: Business Economics 48. In 2016. Teller Company sold 3,000 units at $600 each. Variable expenses were $420 por unit, and fixed expenses were $240,000. What was Teller's 2016 net income? a. $300,000 b. $540,000 c. $1,260,000 d. $1,800,000 Ans: , LO: 1, Bloom: AP, Difully: Medium, Min: 2 AACSB: Analytic, AICPA BB: Legal Regulatory Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving Decision Making. IMA: Reporting

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