Homework Answers
Using the High Low Method,
Variable Cost per unit = (Cost of Highest Activity - Cost of Lowest Activity)/ (Units of Highest Activity - Units of Lowest Activity)
Fixed Cost = Cost of Highest Activity - (Variable Cost per unit * Units of Highest Activity) or
= Cost of Lowest Activity - (Variable Cost per unit * Units of Lowest Activity)
Q.24
Cost of Highest Activity = $5,000
Cost of Lowest Activity = $4,000
Units of Highest Activity = 1,280
Cost of Lowest Activity = 780
Variable Cost per unit = ($5,000-$4,000)/(1,280 units - 780 units) = $2 per unit
Fixed Cost = $5,000 - ($2 per unit * 1,280 units) = $2,440 or
= $4,000 - ($2 per unit * 780 units) = $2,440
Q.16 C. Unit VC = $5 / FC = $130
Cost of Highest Activity = $260
Cost of Lowest Activity = $190
Units of Highest Activity = 26
Cost of Lowest Activity = 12
Variable Cost per unit = ($260-$190)/(26 units - 12 units) = $5 per unit
Fixed Cost = $260 - ($5 per unit * 26 units) = $130 or
= $190 - ($5 per unit * 12 units) = $2,440
Q.8 A. 75%
Margin of Safety Sales = Profit/ Profit Volume Ratio
Margin of Safety % = [Margin of Safety Sales/Current Sales] *100 or
Margin of Safety % = [(Current Sales - Break Even Sales)/Current Sales] * 100
Break Even Sales = Fixed Cost/ Profit Volume Ratio
Profit
Selling Price per unit = $3
Less: Variable Cost per unit = ($2)
Contribution per unit = $1
* Number of units = 4,000 [Current Sales $12,000/Selling Price per unit $3]
Total Contribution = $4,000
Less: Total Fixed Cost = ($1,000)
Total Profit = $3,000
Profit Volume Ratio = [Contribution per unit/ Selling price per unit] *100 = $1/$3 *100 = 33.33%
Margin of Safety Sales = $3,000/33.33% = $9,000
Margin of Safety % = $9,000/$12,000 *100 = 75%
Using Break Even Sales Method,
Break Even Sales = $1,000/33.33% = $3,000
Margin of Safety % = [($12,000-$9,000)/$12,000]*100 = 75%
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========================= MANAGERIAL ACCOUNTING QUESTIONS Please answer ALL in DETAILS to get upvote Thanks!!! At current sales...
=========================
MANAGERIAL ACCOUNTING QUESTIONS
Please answer ALL in DETAILS to get upvote
Thanks!!!
At current sales volume of 100 units, fixed costs (FC) are $3 per unit and variable costs (VC) are $7 per unit. a) Compute total fixed costs at current sales volume. total FC b) Suppose that sales volume increases to 125 units. At this new volume, total FC FC per unit VC per unit = total VC- c) Write down the total cost equation: *volume (e.g., if...
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Question 3: Computations for fixed and variable costs At current sales volume of 100 units, fixed costs (FC) are $4 per unit and variable costs (VC) are $8 per unit. a) Compute total fixed costs at current sales volume. total FC400 b) Suppose that sales volume increases to 125 units. At this new volume, total FC FC per uni VC per unit = total VC Enter a number c) Write down the total cost equation: * volume (e.g., if TC...
uestIO At current sales volume of 100 units, fixed costs (FC) are $5 per unit and variable costs (VC) are $10 per unit a) Compute total fixed costs at current sales volume. total FC- b) Suppose that sales volume increases to 125 units. At this new volume, total FC FC per unit - VC per unit total VC- c) Write down the total cost equation: TC- (e.g., if TC 500+2*volume, enter 500 in the first box and 2 in the...
ABC Co. has the following information available: Total Cost January February March April Production Vol. (units) 34,200 35,900 36,400 33,100 392,800 408,100 412,600 382,900 Using the high-low method, calculate the variable cost per unit and the fixed cost. ABC Co. sells its widgets for $22.00 each. What is the contribution margin? What is the contribution margin ratio? How many units must they sell to break-even? How many units must the sell to achieve a target profit of $350,000? If ABC...
Project #2 Sales Projections in Units January February March April May 13.402 45,819 44,164 53,722 52,482 Projected Sales Price/Unit $ 450.00 Monthly Projected Selling & Administrative Expenses Variable Cost/Unit $16.00 Fixed Costs $5,519 Production: Desired Ending Inventory Beginning Inventory (new business) 59.0% 0 64.6% Materials Desired Ending Inventory Number of Materials per Unit Projected Cost/Material Unit Beginning Inventory (new business) 11.0 $23.00 0 Direct Labor Time per Unit (in hours) Cost per Hour 1.00 $21.00 Manufacturing Overhead Variable Cost/Unit $5.00...
7) Total Variable cost = Number of units sold x variable cost per unit 8) Operating Leverage = Contribution Margin / Net Income Complete the below table: Sales Variable Cost Total Contribution Margin Fixed Costs Operating Income Break-even Sales Revenue 150,000 125,000 50,000 B 85,000 35,000 15,000 75,000 65,000 113,750 D 180,000 50,000 144,000 Remember: 1) Variable costs rise and fall with an increase or decrease in revenue 2) Fixed costs do not rise and fall with an increase or...
WESTERWHEAT Contribution Margin Income Statement 150,000 units sold Total Per Unit Percent Sales revenue $1,950,000 $13.00 1008 Less: Variable 1,200,000 8.00 620 costs Contribution $ 750,000 $ 5.00 388 Less: Fixed costs 350,000 Net operating $ 400,000 income Knowledge Check 01 What is Westerwheat's degree of operating leverage? 2143 4.875 1.875 3.000 Knowledge Check O2 A 20 percent increase in sales revenue will increase net operating Income by 42.86% 97.50% 60.00% 37.50% Knowledge Check 03 Decreasing fixed costs by $100,000...
=========================
MANAGERIAL ACCOUNTING QUESTIONS
Please answer ALL in DETAILS to get upvote
Thanks!!!
At current sales volume of 100 units, fixed costs (FC) are $3 per unit and variable costs (VC) are $7 per unit. a) Compute total fixed costs at current sales volume. total FC b) Suppose that sales volume increases to 125 units. At this new volume, total FC FC per unit VC per unit = total VC- c) Write down the total cost equation: *volume (e.g., if...
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