1. ABC Company's sales were $240,000 for 2016. Fixed costs were $80,000 and variable costs were $180,000. What was the contribution margin ratio?
A. 75%
B. 50%
C. 33%
D. 25%
2. Wendy Company is considering the purchase of a $20,000 machine, assuming an estimated five-year useful life, an expected cash inflow of $5,000 annually, and a 12% cost of capital. What is the profitability index (to the nearest 2 places)?
A. 0.25
B. 0.71
C. 0.90
D. 1.25
3. A company with fixed costs of $120,000 produces a product with variable costs of $16 per unit and a selling price of $24. What amount of sales would be required for a net income of $60,000?
A. $220,000
B. $240,000
C. $300,000
D. $540,000
4. A company has fixed costs of $30,000 making a product that sells for $40 and has a variable cost of $16. What is the break-even point in dollars?
A. $ 30,000
B. $ 50,000
C. $ 60,000
D. $100,000
5. Information on the Glenn Company's direct labor costs for the month of July is as follows:
Standard direct labor-hours...................... 66,000
Actual direct labor-hours.......................... 70,000
Standard direct labor rate per hour........... $ 6.60
Total payroll........................................... $490,000
What was Glenn's labor efficiency variance?
A. $28,000 (favorable)
B. $28,000 (unfavorable)
C. $26,400 (favorable)
D. $26,400 (unfavorable)