Free CMA Exam Braindumps (page: 93)

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View Related Case Study

Harper and her band want to put on a concert. They have looked at two varies a small one and a large one, and have compiled the following information


The variable cost per customer for both venues s $2 The band will charge $10 per customer for the small venue or $14 for U large venue. what is the breakeven point of the large venue?

  1. 358
  2. 375
  3. 381
  4. 417

Answer(s): D

Explanation:

In a breakeven analysis, set the operating income equal to 0 and equate it with revenues minus fixed costs reruns variable costs. The breakeven point is therefore



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Harper and her band want to put on a concert They have looked at two venues, a small one and a large one. and have compiled the blowing information:


Harper owers the local music store $1 ,000 for equipment. If she intends to use the profit from the concert to pay back the debt, how many tickets must she sell?

  1. 300 small or 429 large
  2. 375 small or 429 large
  3. 375smallor500large
  4. 300 small or 500 large

Answer(s): C

Explanation:

The breakeven formula equates operating income with revenue minus fixed costs minus variable cost in this problem, set operating income to $1,000 dollars and solve'



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Two compares are expected to have annual sales of I .000.000 decks at playing cards next year Eirne1es for next year are presented below:

  1. 800.000 420.000 1.180,000
  2. 800.000 420,000 1000,000
  3. 533,334 106.000 1.000,000
  4. 533,334 105.000 1,180,000

Answer(s): A

Explanation:

the BEP in units Is found by dividing the fixed costs by tile UCM



View Related Case Study

Lyman Company has the opportunity increase annual sales $100,000 by selling to a new. riskier group of customers The uncollectible expense is expected to be 15%, and collection costs will be 5%. The company's manufacturing and selling expenses are 70% of sales, and its effective tax rate is 40%. If Lyman should accept this opportunity. the company's after-tax profits would increase by

  1. $6,000
  2. $10,000
  3. $10200
  4. $14,400

Answer(s): A

Explanation:

Sales increase by $100,000. Collection and bad debt expense is 20% of sales (15% + Total variable expenses for the new sales will be 90% (20% + 70%) of each sales dollar.



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