Question

question 1

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 th 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 20,300 Case #4 4,900 Unit sold 2001 Case #1 9,200 $ 257,600 110,400 81,000 $ 352,500 Sales Variable expenses Fixed expenses Net operating income (loss) Contribution margin per unit 182,7007 170,000 41,500 15 88.000 (34,100) $ $ $ $ $ 134,300 11 Required Required B >

Answer 1

Required A

Case#1

Net operating income/(loss) = Sales - variable expenses - fixed expenses

Net operating income/(loss) = 257,600-110,400-81,000 = $66,200

Contributions margin per unit = (Sales - variable expenses)/No. of units

Contributions margin per unit = (257,600-110,400)/9,200 = $16 per unit

Case#2

Net operating income/(loss) = Sales - variable expenses - fixed expenses

41,500 = 352,500 - variable expenses - 170,000

Variable expenses = 352,500-170,000-41,500 = $141,000

Contribution margin = Sales - variable expenses

Contribution margin = 352,500 - 141,000 = $211,500

Units sold = Contribution margin / Contribution margin per unit

Units sold = 211,500/15 = 14,100 units

Case#3

Total contribution = Units sold*Contribution margin per unit

Total contribution = 20,300*11 = $223,300

Contribution margin = Sales - variable expenses

223,300 = Sales - 182,700

Sales = 223,300+182,700 = $406,000

Net operating income/(loss) = Sales - variable expenses - fixed expenses

134,300 = 406,000 - 182,700 - fixed expenses

Fixed expenses = 406,000 - 182,700 - 134,300 = $89,000

Case#4

Net operating income/(loss) = Sales - variable expenses - fixed expenses

(34,100) = 151,900 - variable expenses - 88,000

Variable expenses = 151,900 - 88,000 + 34,100 = $98,000

Contributions margin per unit = (Sales - variable expenses)/No. of units

Contributions margin per unit = (151,900-98,000)/4,900 = $11 per unit

Unit sold Sales Variable expenses Fixed expenses Net operating income / (loss) Contribution margin per unit Case#1 9,200 2,57,600 1,10,400 81,000 66,200 Case#2 14,100 3,52,500 1,41,000 1,70,000 41,500 Case#3 20,300 4,06,000 1,82,700 89,000 1,34,300 Case#4 4,900 1,51,900 98,000 88,000 -34,100 11 11

Required B

Case#1

Contribution margin ratio = Contribution/Sales*100

43% = Contribution/454,000

Contribution = 454,000*43% = $195,220

Contribution = Sales - Variable cost

195,220 = 454,000 - Variable cost

Variable cost = 454,000-195,220 = $258,780

Net operating income/(loss) = Sales - variable expenses - fixed expenses

77,220 = 454,000 - 258,780 - fixed expenses

Fixed expenses = 454,000 - 258,780 -77,220 = $118,000

Case#2

Net operating income/(loss) = Sales - variable expenses - fixed expenses

Net operating income/(loss) = 198,000 - 126,720 - 61,000

Net operating income/(loss) = $10,280

Contribution = Sales - variable expenses

Contribution = 198,000-126,720 = $71,280

Contribution margin ratio = Contribution/Sales*100

Contribution margin ratio = 71,280/198,000*100

Contribution margin ratio = 36%

Case#3

Net income/(loss) = Contribution - Fixed cost

123,300 = Contribution - 470,000

Contribution = $593,300

Contribution margin ratio = Contribution/Sales*100

85% = 593,300/Sales

Sales = 593,300/85% = $698,000

Contribution = Sales - variable expenses

593,300 = 698,000 - variable expenses

Variable expenses = 698,000-593,300 = $104,700

Case#4

Contribution = Sales - variable expenses

Contribution = 299,000-80,730 = $218,270

Contribution margin ratio = Contribution/Sales*100

Contribution margin ratio = 218,270/299,000*100 = 73%

Net operating income/(loss) = Contribution - fixed expenses

270 = 218,270- fixed expenses

Fixed expenses = 218,270 - 270 = $218,000

Sales Variable expenses Fixed expenses Net operating income / (loss) Contribution margin ratio (%) Case#1 4,54,000 2,58,780 1,18,000 77,220 43% Case#2 1,98,000 1,26,720 61,000 10,280 36% Case#3 6,98,000 1,04,700 4,70,000 1,23,300 85% Case#4 2,99,000 80,730 2,18,000 270 73%