IMANET IMANET Certifications IMANET-CMA Questions & Answers

• Question 441:

  Romashka, Inc. plans to introduce a new product. The marketing manager forecasts a unit selling price of $500. The variable cost per unit is estimated to be $100. In addition1 there is a total of $110,000 fixed indirect manufacturing costs, and $150000 in fixed operating costs associated with these units. What quantity will the company have to sell to break even?

  A. 220 units.

  B. 275 units.

  C. 520 units.

  D. 650 units.

  Correct Answer: D

• Question 442:

  Associated Supply, Inc. is considering introducing a new product that will require a $250,000 investment of capital. The necessary funds would be raised through a bank loan atan interest rate of 8%. The fixed operating costs associated with the product would be $122,500, while the contribution margin percentage would be 42%. Assuming a selling price of $15 per unit, determine the number of units (rounded to the nearest whole unit) Associated would have to sell to generate earnings before interest and taxes (EBIT) of 32% of the amount of capital invested in the new product.

  A. 35,318 units.

  B. 32,143 units.

  C. 25,575 units.

  D. 23,276 units.

  Correct Answer: B

• Question 443:

  Total production costs of prior periods for a company are listed as follows. Assume that the same cost behavior patterns can be extended linearly over the range of 31000to 35.000 units and that the cost driver for each cost is the number of units produced.

  

  What is the average cost per unit at a production level of 8,000 units for costX?

  A. $5.98

  B. $5.85

  C. $7.90

  D. $4.83

  Correct Answer: A

• Question 444:

  Positive operating income is shown on a cost-volume-profit chart when the

  A. Total variable expense line exceeds the total fixed expense line.

  B. Total expense line exceeds the total sales revenue line.

  C. Total sales revenue line exceeds the total fixed expense line.

  D. Total sales revenue line exceeds the total expense line.

  Correct Answer: D

  A cost-volume-profit chart contains elements (lines, points, axes) that identify variable cost, fixed cost, the breakeven point, total revenue, profit, and volume in units. When the total sales revenue line rises above the total expense line, a company will have positive net income.

• Question 445:

  Total production costs of prior periods for a company are listed as follows. Assume that the same cost behavior patterns can be extended linearly over the range of 3,000 to 35,000 units and that the cost driver for each cost is the number of units produced.

  

  The company is concerned about its current operating performance that is summarized as follows.

  

  How many additional units should have been sold in order for the company to break even?

  A. 32,000

  B. 16,000

  C. 12,800

  D. 8,000

  Correct Answer: D

• Question 446:

  The following data pertains to XYZ Company for the current year of operations.

  

  Assuming that XYZ Company sells 80,000 units, what is the maximum that can be paid for an advertising campaign while still breaking even?

  A. $135,000

  B. $1,015,000

  C. $535,000

  D. $695,000

  Correct Answer: A

• Question 447:

  The following data pertains to XYZ Company for the current year of operations.

  

  How many units does XYZ Company need to produce and sell to make a before-tax profit of 10% of sales?

  A. 65000 units.

  B. 36.562 units.

  C. 90,000 units.

  D. 25,000 units.

  Correct Answer: C

• Question 448:

  A company with $280,000 of fixed costs has the following data:

  

  Assume three units of A are sold for each unit of B sold. How much will sales be in dollars of product B at the breakeven point?

  A. $200,000

  B. $240,000

  C. $280,000

  D. $840,000

  Correct Answer: B

• Question 449:

  A retail company determines its selling price by marking up variable costs 60%. In addition, the company uses frequent selling price markdowns to stimulate sales. If the markdowns average 10%, what is the company's contribution margin ratio?

  A. 27.5%

  B. 30.6%

  C. 37.5%

  D. 41.7%

  Correct Answer: B

• Question 450:

  A company has sales of $500,000, variable costs of $300,000, and pretax profit of $150,000. If the company increased the sales price per unit by 10%, reduced fixed costs by 20%1 and left variable cost per unit unchanged1 what would be the new breakeven point in sales dollars?

  A. $88000

  B. $100000

  C. $110,000

  D. $125,000

  Correct Answer: A