Mendez Company provides the following information about its product:

Mendez Company provides the following information about its product:

Targeted operating income $50,000
Selling price per unit 6.00
Variable cost per unit 1.50
Total fixed costs 125,000

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What is the contribution margin ratio?
Question 1 options:

75%

100%

125%

25%
Question 2 (2.5 points)

The utility bill for a law firm consists of both fixed and variable costs. Refer to the 4-month data below and apply the high-low method to answer the question.

Minutes Total Bill
January 460 $3,000
February 200 $2,675
March 160 $2,625
April 300 $2,800

If the company uses 380 minutes in May, how much will the total bill be?
Question 2 options:

$2425

$2478

$2900

$3767
Question 3 (2.5 points)

Vatsala Company provides the following financial information:

Income from operations $200,000
Interest expense 45,000
Gains/(losses) on sale of equipment (2,500)
Net income 152,500
Total assets at Jan 1 2,600,000
Total assets at Dec 31 3,200,000

Calculate return on investment based on the information given above.
Question 3 options:

6.3%

5.3%

6.9%

7.2%
Question 4 (2.5 points)

) Venkat Inc. manufactures and sells pens for $5 each. Wolf Corp. has offered Venkat Inc. $3 per pen for a one-time order of 3,500 pens. The total manufacturing cost per pen, using traditional costing, is $1 per unit, and consists of variable costs of $0.85 per pen and fixed overhead costs of $0.15 per watch. Assume that Venkat Inc. has excess capacity and that the special order would not adversely affect regular sales. What is the change in operating income that would result from accepting the special sales order?
Question 4 options:

$7000 increase

$7000 decrease

$7525 increase

$7525 decrease
Question 5 (2.5 points)

) Benjamin Equipment Company has several divisions which are investment centers. Data for the Boat Division and the Trailer Division are shown here:

Boat Division Trailer Division
Operating income $90,000 $36,000
Total assets at Jan 1 $670,000 $230,000
Total assets at Dec 31 $710,000 $220,000

Which of the following statements would be the most meaningful interpretation of this data?
Question 5 options:

Performance of Boat Division is better than that of Trailer Division because Boat Division has higher assets.

Trailer Division uses its assets more efficiently than Boat Division because it has higher ROI.

Boat Division shows more efficient use of assets than Trailer Division because it has higher operating income.

) Boat Division is more financially successful than Trailer Division because it shows an increase in assets
Question 6 (2.5 points)

Jackson Company had a finished goods inventory of 55,000 units on January 1. It’s projected sales for the next four months were: January – 200,000 units; February – 180,000 units; March – 210,000 units; and April – 230,000 units. The Jackson Company wishes to maintain a desired ending finished goods inventory of 20% of the following months sales.
What should the budgeted production be for January?
Question 6 options:

236000 units

181000 units

20000 units

219000 units