During its most recent fiscal year, Dover, Incorporated had total sales of $3,040,000. Contribution margin amounted to $1,420,000 and income was $280,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year?

 During its most recent fiscal year, Dover, Incorporated had total sales of $3,040,000. Contribution margin amounted to $1,420,000 and income was $280,000. What amount should have been reported as variable costs in the company's contribution margin income statement for the year?
Multiple Choice
•    
$1,700,000.
•    
$2,760,000.
•    
$1,340,000.
•    
$1,140,000.
•    
$1,620,000.

Answer

 $1,620,000.

Explanation

 $3,040,000-$1,420,000 = $1,620,000

Watson Company has monthly fixed costs of $74,000 and a 50% contribution margin ratio. If the company has set a target monthly income of $14,100, what dollar amount of sales must be made to produce the target income?
Multiple Choice
•    
$176,200
•    
$88,100
•    
$148,000
•    
$28,200
•    
$119,800

Answer

$176,200

Explanation

(74000+14100)=50% = 176200

A firm expects to sell 24,100 units of its product at $10.10 per unit and to incur variable costs per unit of $5.10. Total fixed costs are $61,000. The total contribution margin is:
Multiple Choice
•    
$59,500.
•    
$61,000.
•    
$120,500.
•    
$122,910.
•    
$183,910.

Answer

 $120,500

Explanation

 ($10.10-$5.10) x 24,100 = 120500

If a firm's expected sales are $258,000 and its break-even sales are $194,000, the margin of safety in dollars is:
Multiple Choice
•    
$64,000.
•    
$258,000.
•    
$194,000.
•    
$452,000.
•    
$24,400.

Answer

64,000

Explanation

 $258,000-$194,000 = 64,000