Forrester Company is considering buying new equipment that would increase monthly fixed costs from $120,000 to $150,000 and would decrease the current variable costs of $70 by $10 per unit.The selling price of $100 is not expected to change.Forrester's current break-even sales are $400,000 and current break-even units are 4,000.If Forrester purchases this new equipment,the revised break-even point in dollars would be:

A) $300,000.
B) $400,000.
C) $325,000.
D) $500,000.
E) $375,000.

When the average cost method is applied in a periodic inventory system,

A) the sale of goods during the year will change the unit cost used for calculating ending inventory.
B) an average cost per unit is calculated after each purchase rather than at the end of the period.
C) an average cost per unit is calculated at the end of the period rather than after each purchase.
D) an average cost per unit is not calculated in the same manner that is used for a perpetual inventory system.

Constructive capitalization provides a preview of how the FASB/IASB exposure draft will affect lessee financial statements.

Kay and Lease-Away Inc. enter into a bailment involving the delivery of a moving van to Kay for her use. Unless stated otherwise, the agreement assumes that Kay will

A) return the van.
B) return the van or its equivalent.
C) retain the van.
D) none of the choices.

Keynes believed that when savings exceeds investment

A) the interest rate will decline and equate savings and investment.
B) excessive savings will reduce demand and result in unemployment.
C) wage rates would decline reducing excess savings.
D) prices would increase causing savings to be reduceD.

Nolan receives his bank statement from his bank on January 5th and notices a check that was cashed from his account for $350. The check was not authorized and Nolan does not let the bank know right away because he leaving that day to go on vacation. Nolan forgets about the unauthorized payment until March 10th. At this point, with regards to the check,

A) the bank cannot honor the check
B) Nolan will have to file papers at the bank alleging fraud
C) Nolan cannot hold the bank liable for the check
D) Nolan will have to sue the bank to receive his funds
E) Nolan will have to notify the bank and then wait 30 days to have his money returned