Posted: 15 Nov 2009 at 04:43 | IP Logged
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The Alma Company had the following income statement for the month of July 2005:
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Alma Company |
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Income Statement |
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For the Month of July 2005 |
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Sales ($70 x 10,000) |
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$700,000 |
Cost of goods sold: |
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Direct materials ($15 x 10,000) |
$150,000 |
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Direct labor ($10 x 10,000) |
100,000 |
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Variable factory overhead ($7 x 10,000) |
70,000 |
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Fixed factory overhead |
220,000 |
540,000 |
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Gross profit |
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$160,000 |
Selling and administrative expenses: |
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Variable ($1 x 10,000) |
$10,000 |
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Fixed |
140,000 |
150,000 |
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Operating income |
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$ 10,000 |
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======== | What is the sales volume required to earn a profit of $135,000?
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a. |
10,909 units | |
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b. |
8,334 units | |
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c. |
15,000 units | |
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d. |
10,758 units | |
The answer is C $15,000, isnt that incorrect b/c shouldnt it say profit of $195,000 not $135,000?? isnt that a typo?
thanks
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