Question

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 20,600 Case #1 9,900 $ 287,100 118,800 88,000 Case #4 4,300 $ 137,600 $ 286,000 Unit sold Sales Variable expenses Fixed expenses Net operating income (loss) Contribution margin per unit 206,000 175,000 (32,000) 11 82,000 (8,900) $ $ $ $ $ 204,400 141

Answer 1

A)
Case # 1
Sales	$287,100
Less: Variable costs	($118,800)
Contribution Margin	$168,300
Less: Fixed Expenses	($88,000)
Net Operating Income (loss)	$80,300
Contribution Margin per unit ($168,300/9,900 units)	$17
Case # 2
Net operating income (loss)	($32,000)
Add: Fixed Expenses	$175,000
Contribution Margin	$143,000
Number of Units ($143,000/$11)	13,000
Sales Revenue	$286,000
Less: Contribution margin	($143,000)
Variable Expenses	$143,000
Case # 3
Contribution margin per unit	$14
Add: Variable cost per unit ($206,000/20,600)	$10
Selling price per unit	$24
Sales (20,600 units * $24 per unit)	$494,400
Contribution Margin (20,600 units * $14 per unit)	$288,400
Less: Net operating income (loss)	($204,400)
Fixed Expenses	$84,000
Case # 4
Net operating income (loss)	($8,900)
Add: Fixed Expenses	$82,000
Contribution Margin	$73,100
Sales Revenue	$137,600
Less: Contribution margin	($73,100)
Variable expenses	$64,500
Contribution margin per unit ($73,100/4,300 units)	$17
B)
Case # 1
Variable expenses (100% - 39% = 61%*$450,000)	$274,500
Contribution margin ($450,000*39/100)	$175,500
Less: Net operating income (loss)	($57,500)
Fixed Expenses	$118,000
Case # 2
Sales	$205,000
Less: Variable expenses	($141,450)
Contribution margin	$63,550
Less: Fixed expenses	($68,000)
Net Operating Income (Loss)	($4,450)
Contribution margin ratio ($63,550/$205,000*100)	31%
Case # 3
Net operating income	$79,160
Add: Fixed expenses	$466,000
Contribution Margin	$545,160
Sales ($545,160*100/77)	$708,000
Less: Contribution margin	($545,160)
Variable expenses	$162,840
Case # 4
Sales	$290,000
Less: Variable expenses	($104,500)
Contribution Margin	$185,500
Less: Operating income (loss)	$45,500
Fixed Expenses	$231,000
Contribution margin ratio ($185,500/$290,000*100)	64%