Becky's Bakery Sells Three Large Muffins for Every Two Small

question 146

Multiple Choice

Becky's Bakery sells three large muffins for every two small ones. A small muffin sells for $3.00, with a variable cost of $2.00. A large muffin sells for $5.00 with a variable cost of $2.50. What is the weighted-average contribution margin? (Round your intermediate calculations to one decimal place)

• A)$1.93 per muffin
• B)$1.75 per muffin
• C)$1.25 per muffin
• D)$1.90 per muffin

Understand and calculate debt-to-equity ratios.

Determine times interest earned ratios.

Calculate and interpret equity multipliers.

Understand and calculate accounts receivable turnover and total sales.

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Definitions:

Indirect Method

A cash flow statement preparation approach that adjusts net income for changes in non-cash accounts to calculate cash flow from operating activities.

Gain on Sale

The profit earned from the sale of an asset or investment, calculated as the difference between the sale price and the original purchase price.

Operating Activities

The day-to-day actions that are involved in running a business and generating revenue, such as production, sales, and delivery of the company’s product and services.

Direct Method

A way of reporting cash flows from operating activities by listing major classes of gross cash receipts and payments.