Reference no: EM132776609

Questions -

Q1. Sandra's Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Sandra's offers 15-minute haircuts with a shampoo for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, Sandra schedules her 6 employees based on expected client traffic. Each of the employees is paid $1270 per month, with part of their pay coming from client tips. Sandra pays rent and overhead costs of $2200 per month for the facility. Because of the quick nature of the service, Sandra doesn't have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $0.55 each. She also provides shampoo and conditioner for each client at a cost of $0.90 per client. The average price for a haircut is $14. Sandra pays herself $6000 per month. What are Sandra's fixed costs for the month?

$13620

$9820

$11090

$15820

Q2. Sharon's Cutting Station offers a new concept in haircuts; low cost and very quick. Set in a local mall, Sharon's offers 15-minute haircuts for harried shoppers who do not have time for lengthy appointments. To ensure that the clients are in and out quickly, she schedules her 5 employees based on expected client traffic. Each of the employees is paid $1220 per month, with part of their pay coming from client tips. Sharon pays rent and overhead costs of $2400 per month on the facility. Because of the quick nature of the service, Sharon doesn't have time to clean combs in between clients, so she uses a new comb for each customer, at a cost of $0.50each. She also provides shampoo and conditioner for each client at a cost of $1.05 per client. The average price for a haircut is $13. Sharon pays herself $5600 per month. What is Sharon's contribution margin per haircut?

$11.45

$11.95

$12.50

$11.15

Q3. Cross Creek Company sells concrete culverts. Currently, the company's sales revenue is $1170000, variable costs total $585000, and fixed costs total $390000. If Cross Creek's controller has calculated the company's breakeven point to be $775100, what is the company's margin of safety?

$19500

$394900

$195000

$580100

Q4. Thomas's Bakery sells strawberry cakes for $20 each. Thomas's variable costs are $10 and her fixed costs total $2940 per month. If Thomas's tax rate is 25%, how many cakes must Thomas sell each month if she wants to earn $5880 in net income?

588

1176

882

1078

Q5. Cullumber Work's product, Cullumber Supreme, sells for $78.4 and its variable cost is $57.2 while the cost of goods sold per unit is $55.8. What is Cullumber Work's markup percentage on variable cost and what is its gross margin percentage?

37%; 29%

27%; 39%

37%; 39%

27%; 29%