ACCT 526 Final Exam - University of Louisiana, Lafayette

ACCT 526 Final Exam - University of Louisiana,
Lafayette
1. Calculate the required sales volume to reach a target income: Head-First
Company expects to sell 4,400 units at $70 each. Variable costs are $45 per unit and
total fixed costs are $50,300. How many units are needed to earn an operating income
of $61,200?

A. 4,400 units

B. 4,460 units

C. 4,510 units

D. 4,600 units

- >>> B. 4,460 units (Calculation: [$50,300 + $61,200] / [$70 - $45])



2. Determine the sales revenue required for a target profit: Head-First Company
plans to sell 5,800 units at $76 each. The contribution margin ratio is 41%. Total fixed
costs are $49,600. What is the total sales revenue needed to earn $78,156?

A. $311,600

B. $295,400

C. $320,000

D. $315,800

- >>> A. $311,600 (Calculation: [$49,600 + $78,156] / 0.41)



3. Break-Even Point for Multiple Products: Head-First sells Bicycle Helmets ($74
price, $48 variable cost) and Motorcycle Helmets ($210 price, $145 variable cost) in a
4:1 ratio. Total fixed costs are $109,200. What is the break-even point for each?

A. Bicycle: 10,500; Motorcycle: 2,625

B. Bicycle: 12,000; Motorcycle: 3,000