Question

Exercise 5-11 Missing Data; Basic CVP Concepts [LO5-1, LO5-9] Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.) Required: a. Assume that only one product is being sold in each of the four following case situations: b. Assume that more than one product is being sold in each of the four following case situations: (For all requirements, Loss amounts should be indicated by a minus sign.) Complete this question by entering your answers in the tabs below. Required A Required B Assume that only one product is being sold in each of the four following case situations: Case #2 Case #3 19,600 Unit sold Case #4 5,200 166,400 $ Case #1 9,200 285,200 147,200 99,000 $ 351,000 $ Sales Variable expenses Fixed expenses Net operating income (loss) Contribution margin per unit 294,000 168,000 14,000 R 14 73,000 15,400 $ $ $ S 115,000 10 < Required A Required B ......

Answer 1

Answer to Requirement A:

Case #1:

Net operating income (loss) = Sales - Variable expenses - Fixed expenses
Net operating income (loss) = $285,200 - $147,200 - $99,000
Net operating income (loss) = $39,000

Contribution margin per unit = (Sales - Variable expenses) / Units sold
Contribution margin per unit = ($285,200 - $147,200) / 9,200
Contribution margin per unit = $15

Case #2:

Net operating income (loss) = Sales - Variable expenses - Fixed expenses
$14,000 = $351,000 - Variable expenses - $168,000
Variable expenses = $169,000

Contribution margin per unit = (Sales - Variable expenses) / Units sold
$14 = ($351,000 - $169,000) / Units sold
Units sold = 13,000

Case #3:

Contribution margin per unit = (Sales - Variable expenses) / Units sold
$10 = (Sales - $294,000) / 19,600
Sales = $490,000

Net operating income (loss) = Sales - Variable expenses - Fixed expenses
$115,000 = $490,000 - $294,000 - Fixed expenses
Fixed expenses = $81,000

Case #3:

Net operating income (loss) = Sales - Variable expenses - Fixed expenses
$15,400 = $166,400 - Variable expenses - $73,000
Variable expenses = $78,000

Contribution margin per unit = (Sales - Variable expenses) / Units sold
Contribution margin per unit = ($166,400 - $78,000) / 5,200
Contribution margin per unit = $17

Answer to Requirement B:

Case #1:

Contribution margin ratio = (Sales - Variable expenses) / Sales
0.37 = ($444,000 - Variable expenses) / $444,000
Variable expenses = $279,720

Net operating income (loss) = Sales - Variable expenses - Fixed expenses
$47,280 = $444,000 - $279,720 - Fixed expenses
Fixed expenses = $117,000

Case #2:

Contribution margin ratio = (Sales - Variable expenses) / Sales
Contribution margin ratio = ($209,000 - $144,210) / $209,000
Contribution margin ratio = 31%

Net operating income (loss) = Sales - Variable expenses - Fixed expenses
Net operating income (loss) = $209,000 - $144,210 - $50,000
Net operating income (loss) = $14,790

Case #3:

Contribution margin ratio = (Sales - Variable expenses) / Sales
0.85 = (Sales - Variable expenses) / Sales
0.15 * Sales = Variable expenses

Net operating income (loss) = Sales - Variable expenses - Fixed expenses
$125,550 = Sales - 0.15 * Sales - $472,000
0.85 * Sales = $597,550
Sales = $703,000

Variable expenses = 0.15 * Sales
Variable expenses = 0.15 * $703,000
Variable expenses = $105,450

Case #4:

Net operating income (loss) = Sales - Variable expenses - Fixed expenses
-$33,400 = $295,000 - $94,400 - Fixed expenses
Fixed expenses = $234,000

Contribution margin ratio = (Sales - Variable expenses) / Sales
Contribution margin ratio = ($295,000 - $94,400) / $295,000
Contribution margin ratio = 68%