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ACC 241 Exam 2 Questions and Answers | 100% Pass

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  • ACC 241

ACC 241 Exam 2 Questions and Answers | 100% Pass If the sale price per unit decreases and variable costs per unit remain the same, what will be the effect on the contribution margin ratio? A. It will remain the same B. It will decrease C. It will increase D. It is impossible to determine wit...

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  • September 25, 2024
  • 39
  • 2024/2025
  • Exam (elaborations)
  • Questions & answers
  • ACC 241
  • ACC 241
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EmillyCharlotte
TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024

ACC 241 Exam 2 Questions and
Answers | 100% Pass


If the sale price per unit decreases and variable costs per unit remain the same, what

will be the effect on the contribution margin ratio?




A. It will remain the same

B. It will decrease

C. It will increase

D. It is impossible to determine with the given information - ✔️✔️Correct-B. It will

decrease

If the contribution margin ratio increases

A. price must have decreased

B. the variable cost ratio decreases

C. the break-even point increases

D. fixed costs must have decreased

E. more units must be sold to break even - ✔️✔️Correct-B. the variable cost ratio

decreases

Christine Enterprises sells two products, larges and smalls. Larges sell for $120 per unit

with variable costs of $80 per unit. Smalls sell for $30 per unit with variable costs of $10

1/39

,TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
per unit. Total fixed costs for the company are $40,000. Christine Enterprises typically

sells three larges for every two smalls. What is the breakeven point in total units?



A. 294 units

B. 2,500 units

C. 1,250 units

D. 750 units - ✔️✔️Correct-C. 1,250 units

Danielle Manufacturing has the following operating data for the most recent year:



Selling Price per Unit $60

Variable Cost per Unit $22

Fixed Expenses $504,000



Management plans to improve the quality of its only product by: (1) replacing a

component that costs $3.50 with a higher-grade component that costs $5.50; and (2)

renting a packing machine for $18,000 per year. If the company would like to earn a

target profit of $288,000 BEFORE TAXES of 40%, the company must sell:



A. 21,316 units

B. 27,833 unit

C. 19,300 units


2/39

,TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
D. 22,500 units - ✔️✔️Correct-D. 22,500 units

If both fixed expenses and the selling price per unit increase while variable costs per

unit are unchanged, which of the following statements is true?



A. Breakeven point in units remains unchanged

B. Breakeven point in units decreases

C. Breakeven point in units could increase, decrease, or remain the same

D. Breakeven point in units increases - ✔️✔️Correct-C. Breakeven point in units could

increase, decrease, or remain the same

Blue Technologies manufactures and sells tablets. Great Products Company has

offered Blue Technologies $21 per tablet for 10,000 tablets. Blue Technologies' normal

selling price is $32 per tablet. The total manufacturing cost per tablet is $16 and

consists of variable costs of $11 per tablet and fixed overhead costs of $5 per tablet.

(NOTE: Assume excess capacity and no effect on regular sales.)



Should Blue Technologies accept or reject the special sales order?



A. Accept, because operating income would increase $320,000

B. Reject, because operating income would decrease $210,000

C. Reject, because operating income would decrease $100,000




3/39

, TITLE: EMILLYCHARLOTTE 2024/2025 ACADEMIC PERIOD
OWNER: EMILLYCHARLOTTE
COPYRIGHT STATEMENT: ©2024 EMILLYCHARLOTTE. ALL RIGHTS RESERVED
FIRST PUBLISHED: SEPTEMBER 2024
D. Accept, because operating income would increase $100,000 - ✔️✔️Correct-D. Accept,

because operating income would increase $100,000

A company's manager would consider which of the following in deciding whether to

discontinue its electronics product line?



A. The costs it could save by discontinuing the product line

B. The revenues it would lose from discontinuing the product line

C. How discontinuing the electronics product line would affect sales of its other products

(like CDs)

D. All of the above - ✔️✔️Correct-D. All of the above

Fresco Appliances manufactures two products: Food Processors and Espresso

Machines. The following data are available:



Food Processors:

Sales Price: $135 Variable Costs: $60



Espresso Makers:

Sales Price: $255 Variable Costs: $190



The company can manufacture two food processors per machine hour or three

espresso machines per machine hour. The company's production capacity is 1,600


4/39

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