A practice question that I created to prepare for the midterm. This problem is a comprehensive one meaning that it covers topics in multiple chapters, included is the solution for said problem
Premium

3 Pages
146 Views
Unlock Document

Department
Financial Accounting
Course
MGAB03H3
Professor
Liang Chen
Semester
Winter

Description
MONEYBAGS INC. Moneybags Inc. is planning on a large expansion project to build another factory in the near future and has asked you, their accountant to figure out some numbers so that they can make some decisions regarding this project. Moneybags Inc. only manufactures one type of good, money bags. April 2009 Selling Price per unit $84.50 Direct Materials per unit $5.33 Direct Labour per unit $16.86 Variable Manufacturing Overhead per unit $1.77 Moneybags was able to sell 869 units in the month of April. Their rent expense for the month is $3500, property taxes are $60,000 for the quarter, insurance expense of $1052 per month and $80,000 for the annual salary of each of the three employees. 1.) Find the Safety Margin percent in Sales Amount and Quantity on a monthly basis 2.) Using the Degree of Operating Leverage find the percent change in profits if management is expecting to increase sales by 15% 3.) >[ZZZ,}L2Zneeds to have their operating income equalling 55% of their sales on an annual basis in order to fund their project. Find the number of items they would need to sell to achieve this. *Note: Assume that the selling price of the moneyb
More Less

Related notes for MGAB03H3

Log In


OR

Join OneClass

Access over 10 million pages of study
documents for 1.3 million courses.

Sign up

Join to view


OR

By registering, I agree to the Terms and Privacy Policies
Already have an account?
Just a few more details

So we can recommend you notes for your school.

Reset Password

Please enter below the email address you registered with and we will send you a link to reset your password.

Add your courses

Get notes from the top students in your class.


Submit