On the Basis of This Information Only

question 49

Multiple Choice

On the basis of this information only:

• A) The number of units transferred in May from Department Q to the next process or department was 34,000.
• B) There were more units in Department Q's ending inventory than in Department Q's beginning inventory for May.
• C) Department Q completed 48,000 units of product during May.
• D) Department Q used enough materials during May to produce 48,000 completed units.

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Definitions:

Sales Mix

The combination of products that a company sells, which can affect profitability due to different margins on each product.

Fixed Expenses

Costs that do not change with the level of production or sales over a certain period, such as rent or salaries.

Operating Leverage Factor

A measure that quantifies the proportion of fixed versus variable costs in a company's operating structure, indicating sensitivity to changes in sales volume.

Contribution Margin Ratio

The contribution margin ratio is the percentage of revenue that exceeds total variable costs, indicating how much of the sales revenue is available to cover fixed costs and generate profit.