You are on page 1of 4

sells two products--J and K. The sales mix is expected to be $3.

00 of sales of P
roduct K for every $1.00 of sales of Product J. Product J has a contribution mar
gin ratio of 40% whereas Product K has a contribution margin ratio of 50%. Annua
l fixed expenses are expected to be $120,000. The overall break-even point for t
he company in dollar sales is expected to be closest to:
A) $196,000
B) $200,000
C) $253,000
D) $255,000
Source: CIMA, adapted
Level: Hard
LO: 9
Ans: C

69. Lepage Corporation has provided its contribution format income statement for
January. The company produces and sells a single product.
500 annuasells two products--J and K. The sales mix is expected to be $3.00 of s
ales of Product K for every $1.00 of sales of Product J. Product J has a contrib
ution margin ratio of 40% whereas Product K has a contribution margin ratio of 5
0%. Annual fixed expenses are expected to be $120,000. The overall break-even po
int for the company in dollar sales is expected to be closest to:
A) $196,000
B) $200,000
C) $253,000
D) $255,000
Source: CIMA, adapted
Level: Hard
LO: 9
Ans: C

69. Lepage Corporation has provided its contribution format income statement for
January. The company produces and sells a single product.
lly?
A.
Psells two products--J and K. The sales mix is expected to be $3.00 of s
ales of Product K for every $1.00 of sales of Product J. Product J has a contrib
ution margin ratio of 40% whereas Product K has a contribution margin ratio of 5
0%. Annual fixed expenses are expected to be $120,000. The overall break-even po
int for the company in dollar sales is expected to be closest to:
A) $196,000
B) $200,000
C) $253,000
D) $255,000
Source: CIMA, adapted
Level: Hard
LO: 9
Ans: C

69. Lepage Corporation has provided its contribution format income statement for
January. The company produces and sells a single product.
roject A.
B.
Project B.
C.
The IRRs are equal500 annually?
A.
Project A.
B.
Project B.
C.
The IRRs are equal, hence you are indifferent.
D.
The NPVs are e500 ansells two products--J and K. The sales mix is expect
ed to be $3.00 of sales of Product K for every $1.00 of sales of Product J. Prod

uct J has a contribution margin ratio of 40% whereas Product K has a contributio
n margin ratio of 50%. Annual fixed expenses are expected to be $120,000. The ov
erall break-even point for the company in dollar sales is expected to be closest
to:
A) $196,000
B) $200,000
C) $253,000
D) $255,000
Source: CIMA, adapted
Level: Hard
LO: 9
Ans: C

69. Lepage Corporation has provided its contribution format income statement for
January. The company produces and sells a single product.
nually?
A.
B.
C.
D.

Project A.
Project B.
The IRRs are equal, hence you are indifferent.
The NPVs are equal, hence you are indifferent.

34.
Paybsells two products--J and K. The sales mix is expected to be $3.00 o
f sales of Product K for every $1.00 of sales of Product J. Product J has a cont
ribution margin ratio of 40% whereas Product K has a contribution margin ratio o
f 50%. Annual fixed expenses are expected to be $120,000. The overall break-even
point for the company in dollar sales is expected to be closest to:
A) $196,000
B) $200,000
C) $253,000
D) $255,000
Source: CIMA, adapted
Level: Hard
LO: 9
Ans: C

69. Lepage Corporation has provided its contribution format income statement for
January. The company produces and sells a single product.
ack period (PP), profitability index (PI), and simple accounting rate of return
(SARR) are some of the capital budgeting techniques. What is the effect of an i
ncrease in the cost of capital on these techniques?
iod (PP), profitability index (PI), and simple accounting rate of return (SARR)
are some of the capital budgeting techniques. What is the effect of an increase
in the cost of capital on these techniques?
, hence you are indifferent. 500 annually?
A.
Project A.
B.
Project B. 500 annually?
A.
Project A.
B.
Project B.
C.
The IRRs are equal, hence you are indifferent.
D.
The NPVs are equal, hence you are indifferent.
34.
Payback period (PP), profitability index (PI), and simple accounting rat
e of return (SARR) are some of the capital budgeting techniques. What is the ef
fect of an increase in the cost of capital on these techniques?
C.
D.

The IRRs are equal, hence you are indifferent.


The NPVs are equal, hence you are indifferent.

34.
Payback period (PP), profitability index (PI), and simple accounting rat
e of return (SARR) are some of the capital budgeting techniques. What is the ef
fect of an increase in the cost of capital on these techniques?
D.

The NPVs are equal, hence you are indifferent.

34.
Payback period (PP), profitability index (PI), and simple accounting rat
e of return (SARR) are some of the capital budgeting techniques. What is the ef
fect of an increase in the cost of capital on these techniques?
C) $29.27
D) $28.18
Level: Medium
LO: 2
Ans: D
102. Orach Company s dividend yield ratio on December 31, Year 2 was closest to:
A) 4.0%
B) 4.6%
C) 4.3%
D) 0.5%
Level: Medium
LO: 2
Ans: C
103. Orach Company s return on total assets for Year 2 was closest to:
A) 15.6%
B) 18.6%
C) 17.7%
D) 17.1%
Level: Medium
LO: 2
Ans: B
104. Orach Company s current ratio at the end of Year 2 was closest to:
A) 2.50
B) 1.29
C) 0.35
D) 0.44
C) $29.27
D) $28.18
Level: Medium
LO: 2
Ans: D
102. Orach Company s dividend yield ratio on December 31, Year 2 was closest to:
A) 4.0%
B) 4.6%
C) 4.3%
D) 0.5%
Level: Medium
LO: 2
Ans: C
103. Orach Company s return on total assets for Year 2 was closest to:
A) 15.6%
B) 18.6%
C) 17.7%
D) 17.1%
Level: Medium
LO: 2
Ans: B
104. Orach Company s current ratio at the end of Year 2 was closest to:
A) 2.50
B) 1.29
C) 0.35

D) 0.44
C) $29.27
D) $28.18
Level: Medium

LO: 2

Ans: D

102. Orach Company s dividend yield ratio on December 31, Year 2 was closest to:
A) 4.0%
B) 4.6%
C) 4.3%
D) 0.5%
Level: Medium
LO: 2
Ans: C
103. Orach Company s return on total assets for Year 2 was closest to:
A) 15.6%
B) 18.6%
C) 17.7%
D) 17.1%
Level: Medium
LO: 2
Ans: B
104. Orach Company s current ratio at the end of Year 2 was closest to:
A) 2.50
B) 1.29
C) 0.35
D) 0.44

You might also like