Question

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> Problems Group A P21-49A Calculating cost-volume profit elements The budgets of four companies yield the following information: Learning Objectives 1, 2, 3 Yellow Blue $ 960,000 Company Red Green $ 770,000 132,000 462,000 145,000 220,000 (9) 11,000 (h) $ ( $ 77.00 70% $ 0 162,000 () 93,000 Sales Revenue Variable Costs Fixed Costs Operating Income (Loss) Units Sold Contribution Margin per Unit Contribution Margin Ratio 32,000 160,000 5 2.70 $ 16.00 40% Requirements 1. Fill in the blanks for each missing value. (Round the contribution margin per unit to the nearest cent.) 2. Which company has the lowest breakeven point in sales dollars? 3. What causes the low breakeven point?

Answer 1

1 Particulars Sno Company Green Yellow Blue Red 960000 d (working Note 4) 770000 j (working Note 10) Sales Revenue 1 a(working Note 1) b (working Note 2) Variable cost 162000 21 132000 462000 220000 k (working Note 11) Fixed Cost 3 145000 32000 e (working Note 5)g (working Note 7) Operating Income(loss) 4. 93000 11000 h (working Note 8) k (working Note 12) Unit Sold 5 160000 6 2.70 f (working Note 6) Contribution margin per unit 77.00 16.00 70%i (working Note 9) c (working Note 3) Contribution margin Ratio 40% 7 C

worcing note 1 Variable cost gales variable cost Contribution onit sold Contribution per unit 0 960,000 Ial 28,00 0 a 1,60,000 2 7 9,60,000- worcing note 2 opeoting income Contribu tion ficed Cost fixed Cost 0perating income unit soldContribution perunit t,60,0002.7 b32000 b 32,00032(000 b- troo,000 73 oricing note 2 sales-vanable Cost Contributien margin Rotio salap -52000 9,60ccD 021 960,000 Scanned with CamScanner brabiu 1 sih : CS

worbing rote Contribu tien mogin Ralesvavigble Cosf Reitio Sales 0.7d d-32(000 0.3dT M32,0o0 =414900O ు woncing note s opevcrting inone Fred Cost Bales Vaviable cost &ao00-132,000 1S,000 e e 1,63000 c2 working note 6 Sales value voriable Cart Contribution mqigin Pr unit no:of units Sold 4r0c00 32c00 000 f 28 fez8 CS Scanned with CamScanner

working note a Opeialing inome - Sales-eniable cost ficed (ost 88,000 woTting noteg COntribution Cantributien Prvnit = noof units sold Sales-Varia ble Cost 9 490 2 9on pard he G000 woking note 8ales- ubnable (ost Casti bution margin Ratio Sales G62000 30 000 cS Scannec CamScanr 0a 1M

ooyting note lo Confuildlion mavyin Retio ules-beniable cost sales 5-1,62/000 O.O 0.J-J- 1(62,000 Q.6T 62,000 woiking note l inco mR 8ales-Vavialble Cost fix ed Costofevating 2,70/000 162, 000- K =93,000 K So00 woting note 12 Centi butin Contriutien per unit no of unik old Salesvable at 16 L 2,0/00062 0OO L= 16 L 750 CS Scanned with CamScanner

2 Break even sales Particulars Sno Company Yellow Blue Red Green Variable cost 462000 1 528000 132000 162000 Fixed cost 2 400000 145000 220000 15000 Break Even Sales(1+2) 3 928000 277000 682000 177000