Homework Answers
(1) Total Variable & Fixed Cost :-
|
Total Variable Cost |
Total Fixed Cost |
|
|
Cost of Goods Sold |
($4088000 * 70%) =$2861600 |
($4088000 * 30%) =$1226400 |
|
Selling Expense |
($2044000 * 75%) =$1533000 |
($2044000 * 25%) =$511000 |
|
Administrative Expense |
($2044000 * 50%) =$1022000 |
($2044000 * 50%) =$1022000 |
|
Total |
$5416600 |
$2759400 |
(2) Unit Variable cost = Total Variable cost/Units sold
= $5416600/98550 = $54.96
Unit Contribution Margin = Unit sale price – unit variable cost
= $84 - $54.96 = $29.04
(3) Break Even Sales (Units) for current year :-
Fixed cost/Contribution per unit
$2759400/$29.04 = 95021 units
(4) Break Even Sales (Units) for following year :-
Proposed Fixed cost = $2759400 + $75600 = $2835000
BEP (Units) = $2835000/$29.04 = 97624 units
(5) Target Income $102200
Target units sold = (Fixed cost + Target Income)/Contribution per unit
= ($2835000 + $102200)/$29.04 = 101143 units
(6)
|
Sales ($8278200 + $756000) |
$9034200 |
|
(-) Fixed cost |
$2835000 |
|
(-) Variable cost ($5416600 + $494640*) |
$5911240 |
|
Maximum Income |
$287960 |
*Increased Variable cost = Increase sale * Unit variable cost/Unit sale price
= $756000 * $54.96/$84 = $494640
(7)
|
Sales |
$8278200 |
|
(-) Fixed cost |
$2835000 |
|
(-) Variable cost |
$5416600 |
|
Maximum Income |
$26600 |
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a price of $81 per unit during the current year. Its income
statement for the current year is as follows:
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$9,185,400
Cost of goods sold
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Gross profit
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Selling expenses
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