Accounting is a fundamental aspect of managing finances for individuals, businesses, and organizations. It involves the systematic recording, summarizing, and reporting of financial transactions to provide insights into an entity’s financial health and performance. Whether you’re a budding entrepreneur, a student learning the ropes, or simply curious about financial matters, understanding basic accounting principles is crucial. In this collection of questions and answers, we will delve into the fundamentals of accounting, covering topics such as the accounting equation, financial statements, double-entry accounting, and more. These fundamental concepts are the building blocks for more advanced accounting practices and are essential for making informed financial decisions. So, let’s embark on a journey to demystify the accounting world with these basic questions and their concise answers.
So, let’s get started with Basic Accounting Questions And Answers
Question 1. For Your Sole sells specialized running insoles. They sell their insoles for $75 each. The company has determined the variable costs to be $30 per unit produced and $22,500 in monthly fixed expenses.
Using these numbers, calculate break-even points in units
The correct answer is: 45
Question 2. For Your Sole sells specialized running insoles. They sell their insoles for $75 each. The company has determined the variable costs to be $30 per unit produced and $22,500 in monthly fixed expenses.
Using these numbers, calculate the break-even points in dollars
The correct answer is: 37500
Question 3. For Your Sole sells specialized running insoles. They sell their insoles for $75 each. The company has determined the variable costs to be $30 per unit produced and $22,500 in monthly fixed expenses.
During the month of May, For Your Sole produced 900 insoles. Answer the following questions.
Determine the Sales
Type the answer with no comma
6750
One possible correct answer is: 67500
Determine the variable costs
Type the answer with no comma
2700
One possible correct answer is: 27000
Calculate the Contribution Margin
Type the answer with no comma
4050
One possible correct answer is: 40500
Determine the Fixed Costs
Type the answer with no comma
2250
One possible correct answer is: 22500
Calculate the Net Income
Type the answer with no comma
1800
The correct answer is: 1800
Question 4. For Your Sole sells specialized running insoles. They sell their insoles for $75 each. The company has determined the variable costs to be $30 per unit produced and $22,500 in monthly fixed expenses.
In order to reach their target profit of $45,000, how many insoles will they need to sell?
Type your response with no commas
The correct answer is: 1500
Question 5. For Your Sole sells specialized running insoles. They sell their insoles for $75 each. The company has determined the variable costs to be $30 per unit produced and $22,500 in monthly fixed expenses.
In order to reach their target profit of $45,000, what dollar sales will the company need?
Type the response with no commas.
The correct answer is: 112500
Question 6. For Your Sole sells specialized running insoles. They sell their insoles for $75 each. The company has determined the variable costs to be $30 per unit produced and $22,500 in monthly fixed expenses.
During the month of July, the company had $150,000 in sales volume. Respond to the following.
Calculate the Sales
Type your response with no commas
1500
One possible correct answer is: 150000
Calculate the Variable Costs
Type your response with no commas
-600 X
One possible correct answer is: 60000
Calculate the Contribution Margin Type the answer with no comma
9000
One possible correct answer is: 90000
Determine the Fixed Costs
Type the answer with no comma
-2250 X
One possible correct answer is: 22500
Calculate the Net Income
Type the answer with no comma
6750
One possible correct answer is: 67500
Your answer is partially correct.
You have correctly answered 3 part(s) of this question.
Question 7. H2O water softener company has the opportunity to purchase a new water distillery that will help them reduce their variable costs by $2 per unit. The purchase of the distillery will increase fixed costs by 15%. The following contribution margin income statement was prepared by H2O for the month of September.
H2O had the following income statement for the year ended 2022:
H2O
Contribution Margin Income Statement
For the Year Ended December 31, 2022
Sales ($75 per unit @1500 units)
Variable costs ($15 per unit @1500 units)
Contribution Margin
Fixed Costs
Net Income
112,500
22,500
90,000
40,000
50,000
Assuming H2O will purchase the equipment and their sales volume will remain unchanged, prepare a projected contribution margin income
statement.
Type your responses with no commas
Sales
Type in your response with no commas
1095 X
One possible correct answer is: 112500
Variable Costs
Type in your response with no commas
1950
One possible correct answer is: 19500
Contribution Margin
Type in your response with no commas
9000 X
One possible correct answer is: 93000
Fixed Costs
Type in your response with no commas
4600
One possible correct answer is: 46000
Net income (Loss)
Type in your response with no commas
4400 X
One possible correct answer is: 47000
You have correctly answered 2 part(s) of this question.