Question

Exercise 5-11 Missing Data; Basic CVP Concepts (L05-1, 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 #1 Case #2 Case #3 Case #4

Answer 1

REQUIRED A:

Case 1:

Contribution margin per unit = Sales - Variable cost / units sold

= 276000 - 156400 = 119600/9200 = 13 per unit

Net operating income = Total contribution - Fixed expenses

= 119600 - 93000 = 26600

Case 2:

Contribution margin = fixed cost + profit = 160000 - 25000 = 135000

Contribution margin per unit = 10 hence units sold = 135000/10 = 13500 units

Case 3:

Total contribution = units sold * contribution per unit = 20500 * 12 = 246000

Sales = variable cost + total contribution = 246000 + 225500 = 471500

Fixed cost = contribution - profit = 246000 -168000 = 78000

Case 4:

Total contribution = Fixed cost - loss = 88000 - 16500 = 71500

Variable expenses = sales - contribution =176000 - 71500 =104500

REQUIRED B :

Case 1 :

Variable expenses = sales * variable expenses ratio ( if contribution margin is 39%, the variable expense margin is 61%)

= 454000 * 61% = 276940

Contribution = 454000 - 276940 = 177060

Fixed cost = 177060 - 61060 = 116000

Case2:

Contribution margin percent = Sales - variable cost / sales * 100

= 191000- 131790/191000 *100

= 59210/191000 *100

=31%

Net operating income = contribution - fixed cost = 59210-53000 = 6210

Case 3 :

Contribution = Fixed cost + profit = 470000 +108100 = 578100

Sales = 578100/82% = 705000

Variable expense = 705000-578100=126900

Case 4:

Contribution = 299000 - 92690 = 206310

Contribution % = 206310/299000 *100 = 69%

Fixed cost = Contribution + loss = 206310+15690 = 222000