Page's sells books. The following information summarizes the company's operating expenses for the year:

185) Page's sells books. The following information summarizes the company's operating expenses for the year:

Purchases     $ 105,000
Operating expenses     $   53,000
Beginning merchandise inventory      $   14,000
Ending merchandise inventory     $   11,000
Sales revenue      $ 170,000

What is cost of goods available for sale?
A) $116,000
B) $65,000
C) $119,000
D) $108,000
Answer:  C
Explanation:  C) Calculations: $ 105,000 + 14,000 = $119,000
Diff: 32
LO:  2-5
EOC:  E2-26A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

186) Page's sells books. The following information summarizes the company's operating expenses for the year:

Purchases     $ 105,000
Operating expenses     $   53,000
Beginning merchandise inventory      $   14,000
Ending merchandise inventory     $   11,000
Sales revenue      $ 170,000

What is operating income?
A) $12,000
B) $102,000
C) $108,000
D) $9,000
Answer:  D
Explanation:  D) Calculations: $105,000 + 14,000 = 119,000 - 11,000 = 108,000; next $ 170,000 - 108,000 = 62,000 - 53,000 = $ 9,000
Diff: 3
LO:  2-5
EOC:  E2-26A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

187) Page's sells books. The following information summarizes the company's operating expenses for the year:

Purchases     $ 105,000
Operating expenses     $   53,000
Beginning merchandise inventory      $   14,000
Ending merchandise inventory     $   11,000
Sales revenue      $ 170,000

What is gross profit?
A) $62,000
B) $9,000
C) $65,000
D) $117,000
Answer:  A
Explanation:  A) Calculations: $105,000 + 14,000 = 119,000 - 11,000 = $108,000. Next $ 170,000 - 108,000 = 62,000
Diff: 3
LO:  2-5
EOC:  E2-26A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits
188) Paper Clip Company sells office supplies. The following information summarizes the company's operating activities for the year:

Utilities for the store    $   9,500
Sales commissions     10,000
Sales revenue    164,000
Purchases of merchandise     85,000
January 1 inventory    27,000
Rent for store    13,500
December 31 inventory    23,000

What is cost of goods sold?
A) $85,000
B) $89,000
C) $108,000
D) $112,000
Answer:  B
Explanation:  B) Calculations: $27,000 + 85,000 = 112,000 - 23,000 = $89,000
Diff: 3
LO:  2-5
EOC:  E2-26A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits


189) Paper Clip Company sells office supplies. The following information summarizes the company's operating activities for the year:

Utilities for the store    $   9,500
Sales commissions     10,000
Sales revenue    164,000
Purchases of merchandise     85,000
January 1 inventory    27,000
Rent for store    13,500
December 31 inventory    23,000

What is operating income?
A) $154,500
B) $56,000
C) $42,000
D) $46,000
Answer:  C
Explanation:  C) Calculations: $ 164,000 - 89,000 = 75,000 - 9,500 - 10,000 - 13,500 = 42,000
Diff: 3
LO:  2-5
EOC:  E2-26A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

190) Paper Clip Company sells office supplies. The following information summarizes the company's operating activities for the year:

Utilities for the store    $   9,500
Sales commissions     10,000
Sales revenue    164,000
Purchases of merchandise     85,000
January 1 inventory    27,000
Rent for store    13,500
December 31 inventory    23,000

What is gross profit?
A) $75,000
B) $42,000
C) $83,000
D) $56,000
Answer:  A
Explanation:  A) Calculations: $ 164,000 - 89,000 = 75,000
Diff: 3
LO:  2-5
EOC:  E2-26A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits


191) Paper Clip Company sells office supplies. The following information summarizes the company's operating activities for the year:

Utilities for the store    $   9,500
Sales commissions     10,000
Sales revenue    164,000
Purchases of merchandise     85,000
January 1 inventory    27,000
Rent for store    13,500
December 31 inventory    23,000

What is total operating expense?
A) $33,000
B) $19,500
C) $23,500
D) $23,000
Answer:  A
Explanation:  A) Calculations: $ 9,500 + 10,000 + 13,500 = $33,000
Diff: 2
LO:  2-5
EOC:  E2-26A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits

192) Company X sells widgets. The following information summarizes the company's operating activities for the year:

Beginning inventory      $   7,000
Sales revenue      $ 25,000
Sales commissions     $   1,000
Rent for office     $   2,000
Utilities for the office     $   1,500
Purchases     $   6,000
Ending inventory     $   5,000

What is cost of goods sold?
A) $9,500
B) $6,000
C) $8,000
D) $13,000
Answer:  C
Explanation:  C) Calculations: $7,000 + 6,000 = 13,000 - 5,000 = $8,000
Diff: 3
LO:  2-5
EOC:  E2-26A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes in costs and volume on a company's profits


193) Company X sells widgets. The following information summarizes the company's operating activities for the year:

Beginning inventory      $   7,000
Sales revenue      $ 25,000
Sales commissions     $   1,000
Rent for office     $   2,000
Utilities for the office     $   1,500
Purchases     $   6,000
Ending inventory     $   5,000

What is operating income?
A) $12,500
B) $ 23,500
C) $ 15,500
D) $ 14,500
Answer:  A
Explanation:  A) Calculations: $ 25,000 - 8,000 = 13,000 - 1,500 - 1,000 - 2,000 = 12,500
Diff: 3
LO:  2-5
EOC:  E2-26A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits
194) Company X sells widgets. The following information summarizes the company's operating activities for the year:

Beginning inventory      $   7,000
Sales revenue      $ 25,000
Sales commissions     $   1,000
Rent for office     $   2,000
Utilities for the office     $   1,500
Purchases     $   6,000
Ending inventory     $   5,000

What is gross profit?
A) $15,500
B) $21,000
C) $17,000
D) $12,500
Answer:  C
Diff: 3
LO:  2-5
EOC:  E2-26A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits
195) Company X sells widgets. The following information summarizes the company's operating activities for the year:

Beginning inventory      $   7,000
Sales revenue      $ 25,000
Sales commissions     $   1,000
Rent for office     $   2,000
Utilities for the office     $   1,500
Purchases     $   6,000
Ending inventory     $   5,000

What is total operating expense?
A) $3,000
B) $2,500
C) $3,500
D) $4,500
Answer:  D
Explanation:  D) Calculations: $1,000 + 2,000 + 1,500 = $4,500
Diff: 2
LO:  2-5
EOC:  E2-26A
AACSB:  Analytical Thinking
Learning Outcome:  Define and use cost-volume-profit analysis to analyze the effects of changes
in costs and volume on a company's profits