Practice Final Answer Key Answer Key 1. Direct materials used = 6,000 + 7,000 – 1,000 = 12,000 Cost of goods manufactured = 12,000 + 5,000 + (600 + 500 + 1,900 + 3,500) + 800 – 3,000 = 21,300 Cost of goods sold = 4,000 + 21,300 – 5,300 = 20,000 Gross margin = 31,800 – 20,000 = 11,800 2. B 3. D 4. D Sales 350,000 – CGS 160,000 = 190,000 5. B Sales 350,000 – CGS (variable) 160,000 – Var Sell and Adm 35,000 – Var Adm 15,000 = 140,000 6. C 7. A Orig data CM 20.00 X 3000 = 60,000 – FC 25,000 = NI 35,000 New scenario CM 12.50 X 2250 = 28,125 – FC 25,000 = NI 3,125 Decrease of 31,875 8. C BEP Sales = Fixed Exp/CM ratio = 1,400,000/.35 (2,100.000 / 6,000,000) = 4,000,000 9. B BEP Units = Fixed Exp / Unit CM ratio = 130,000 / 13.00 = 10,000 130,000 = Fixed Manu of 60,000 + Fixed selling and adm of 70,000 The 13.00 unit cm margin is calculated by dividing sales and var costs by 50,000. 10. C Var Exp / Unit = Unit Price – contribution margin ratio 36.00 = 60.00 – 24.00 (40% of $60.00 per unit) 11. B BEP Sales = 28,800 / .4 = 72,000 12. C 13. A DM 13.00 + DL 55.00 + V OH 1.00 = 69.00 14. D DM 13.00 + DL 55.00 + V OH 1.00 + F OH 15.00 = 84.00 F OH = 130,500 / 8,700 15. A Sales (8,300 X $92) $763,600 Variable Expenses Beg Inv 0 Var Manu (8,700 X $69) 600,300 Less EI (400 X 69) (27,600) Variable CGS (572,700) Variable Selling and Admin (8,300 X 5) (41,500) Contribution Margin 149,400 Less Fixed Expenses 138,800 Net Income 10,600

16. B Sales (8,300 X $92) $763,600 Beg Inv 0 CGM (8,700 X $84) 730,800 Less EI (400 X 84) (33,600) CGS (697,200) Gross Margin 66,400