Nappon Co Has Two Products Named X and Y $\text { The following actual operating results were reported after the year was over: }$

question 97

Multiple Choice

Nappon Co. has two products named X and Y. The firm had the following master budget for the year just completed: $\begin{array}{lrrr} & \text { Product X } & \text { Product Y } & \text { Total } \\\text { Sales } & \$ 260,000 & \$ 360,000 & \$ 620,000 \\\text { Variable Costs } & 156.000 & 180,000 & 336,000\\\text { Contribution Margin } & \$ 104,000 & \$ 180,000 & \$ 284,000 \\\text { Fixed costs } & 130,000 & 108,000 & 238,000\\\text { Operating Income (Loss) }&\$(26,000) &\$72,000&\$46,000\\\text { Selling Price per unit }&\$130.00&\$60.00\end{array}$

$\text { The following actual operating results were reported after the year was over: }$

$\begin{array}{lrrr} & \text { Product X } & \text { Product Y } & \text { Total } \\\text { Sales } & \$ 202,500 & \$ 467,500 & \$ 670,000 \\\text { Variable Costs } & 117.000 & 212,500 & 329,500\\\text { Contribution Margin } & \$ 85,500 & \$ 255,000 & \$ 340,500 \\\text { Fixed costs } & 140,000 & 108,000 & 248,000\\\text { Operating Income (Loss) } & \$(54,500) & \$ 147,000 & \$ 92,500\\\text { Units Sold } & 1,500 & 8,500\end{array}$ The selling price variance for Product Y is:

• A) $7,500 favorable.
• B) $25,000 unfavorable.
• C) $42,500 unfavorable.
• D) $52,000 favorable.
• E) $75,000 unfavorable.

Understanding the various ways shareholders can receive profits from corporations and the role of directors in dividend declarations.

Recognizing the differences between nonprofit and for-profit corporations, closely held corporations, and public corporations, including their formation and characteristics.

Identifying the tax classifications of corporations, specifically S corporations, and their qualifications.

Comprehending the responsibilities and rights of corporate directors and officers.

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Definitions:

Municipal Bond

A debt security issued by a state, municipality, or county to finance its capital expenditures, usually exempt from federal taxes and, in some cases, state and local taxes.

Corporate Bond

A type of debt security issued by a corporation to raise funds from investors, who are owed repayment of the loan plus interest.

Futures Contract

A Futures Contract is a legal agreement to buy or sell a particular commodity or financial asset at a predetermined price at a specified time in the future.