IMANET IMANET Certifications IMANET-CMA Questions & Answers

• Question 411:

  The following information relates to Clyde Corporation, Which produced and sold 50,000 units a recent accounting period: For the next accounting period. if production and sales are ,expected to be 40.000 units, the company should anticipate a contribution margin par unit of

  

  A. $186

  B. $310

  C. $730

  D. $1330

  Correct Answer: D

• Question 412:

  Kim is thinking of organizing a fund raiser charity. She has planned to rent a banquet hall and provide to support a local the guests with food, entertainment, and various party favors. She has decided to charge $500 a person. After researching around town, Kim has discovered the following costs:

  

  If Kim's goal is to raise $10,000 for her charily, how many people must attend the banquet?

  A. 404

  B. 425

  C. 428

  D. 446

  Correct Answer: D

• Question 413:

  Kim is thinking of organizing a fundraiser to support a local charity. She has planned to rent a banquet hall and provide the guests with food, entertainment, and various party favors. She has decided to charge $500 a person. After researching around town, Kim has discovered the following costs:

  

  How many guests must attend in order for Kim to break even?

  A. 408 B. 417

  C. 425

  D. 443

  Correct Answer: C

• Question 414:

  Barnes Corporation manufactures skateboards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented in the next column.

  

  For the coming year1 the management of Barnes Corporation anticipates a 10% increase in sales, a 12% increase in variable costs, and a $45,000 increase in fixed expenses. The breakeven point for next year will be

  A. $729,027

  B. $862,103

  C. $214,018

  D. $474,000

  Correct Answer: A

• Question 415:

  Kim is thinking of organizing a funraiser to support a local charity. She has planned to rent a banquet hall and provide the guests with food, entertainment , and various party favors. She has decided to charge $500 a person. After researching around town, Kim has discovered the following costs: What is Kim's contribution margin?

  

  A. $400

  B. $450

  C. $480

  D. $500

  Correct Answer: C

  The contribution margin in a breakeven analysis can be found by taking the revenues per person and subtracting the variable cost per person. In this case, it would be $500-- $20 = $480.

• Question 416:

  The breakeven point (rounded to the nearest dollar) for Barnes Corporation for the current year is

  A. $148,341

  B. $636,364

  C. $729,730

  D. $181,818

  Correct Answer: B

  Fixed costs total $350,000. Variable costs total $675,000. Given sales of $1 1500,000, the contribution margin is $825,000 ($1 ,500,000 -- $675,000). Thus, the contribution margin percentage is 55% ($825,000 ?$1,500,000). Dividing the $350,000 of fixed costs by 55% produces a breakeven point of $636363.64.

• Question 417:

  Multi Frame Company has the following revenue and cost budgets for the two products it sells:

  

  The budgeted unit sales equal the current unit demand, and total fixed overhead for the year is budgeted at $975,000. Assume that the company plans to maintain the same proportional mix. In numerical calculations, Multi Frame rounds to the nearest cent and unit.The total number of units needed to break even if sales were budgeted at 150,000 units of plastic frames and 300,000 units of glass frames with all other costs remaining constant is

  A. 171,958 units.

  B. 418,455 units.

  C. 153,947 units.

  D. 365,168 units.

  Correct Answer: C

• Question 418:

  Multi Frame Company has the following revenue and cost budgets for the two products it sells: The budgeted unit sales equal the current unit demand, and total fixed overhead for the year is budgeted at $975,000. Assume that the company plans to maintain the same proportional mix. In numerical calculations, Multi Frame rounds to the nearest cent and unit.The total number of units needed to break even if the budgeted direct labor costs were $2 for plastic frames instead of $3 is

  A. 154O28 units.

  B. 144444 units.

  C. 156,000 units.

  D. 146177 units.

  Correct Answer: B

  If the labor costs for the plastic frames are reduced by $1 1the composite unit contribution margin will be $27 [($10--$2--$3) + (3)($15--$3--$5)]. Hence1 the new breakeven point is 144,444 units [4 units x ($975 .000 FO + $27)].

• Question 419:

  Multi Frame Company has the following revenue and cost budgets for the two products it sells: The budgeted unit sales equal the current unit demand, and total fixed overhead for the year is budgeted at $975,000. Assume that the company plans to maintain the same proportional mix. In numerical calculations, Multi Frame rounds to the nearest cent and unit.The total number of units Multi Frame needs to produce and sell to break even is

  

  A. 150,000 units.

  B. 8. 354,545 units.

  C. 177,273 units.

  D. 300,000 units.

  Correct Answer: A

  The calculation of the breakeven point is to divide the fixed costs by the contribution margin per unit. This determination is more complicated for a multi-product firm. If the same proportional product mix is maintained, one unit of plastic frames is sold for every three units of glass frames. Accordingly, a composite unit consists of four frames: one plastic and three glass. For plastic frames, the unit contribution margin is $5 ($10-- $2 --$3). For glass frames, the unit contribution margin is $7 ($15 --$3-- $5). Thus, the composite unit contribution margin is $26 ($5 + $7 + $7 + $7), and the breakeven point is 37,500 packages ($975,000 EC + $26). Because each composite unit contains four frames, the total units sold equal 150,000.

• Question 420:

  Moorhead Manufacturing Company produces two products for which the following data have been tabulated. Fixed manufacturing cost is applied at a rate of $1.00 per machine hour. The sales manager has had a $160,000 increase in the budget allotment for advertising and wants to apply the money to the most profitable product. The products are not substitutes for one another in the eyes of the company's customers.

  

  Suppose Moorhead has only 100,000 machine hours that can be made available to produce additional units of XY-7 and BD-4. If the potential increase in sales units for either product resulting from advertising is far in excess of this production capacily, which product should be advertised and what is the estimated increase in contribution margin earned?

  A. Product XY-7 should be produced, yielding a contribution margin of $75,000.

  B. Product XY-7 should be produced, yielding a contribution margin of $133,333.

  C. Product BD-4 should be produced, yielding a contribution margin of $187,500.

  D. Product BD-4 should be produced, yielding a contribution margin of $250,000.

  Correct Answer: D