Question

Assume that Phan actually makes 28,000 units. What would be the total costs and the cost per unit at this level if activity?

5 A h i Depreciation Expensé Decrease in Equipment Increase in Prepaid Rent Decrease in Prepaid Insurance Loss on sale of Equipment 2. Phan Corporation manufactures MP3 players, generally selling from 20,000 to 30,000 units per year. The following cost data apply to the activity levels shown: 30.000 28,000 20,000 25,000 200.000 Paid 700.00 Number of units Total costs Fixed Variable Total costs $300,000 $200.000 .) 50, $500,000 SS2.0 $70,000 stood 10 10. Cost per Unit Fixed Variable Total cost per unit $15.00 $10.00 10.00 $25.00 22.00 10.00 20.70 Required: - 1.) Complete the preceding table by filling the missing amounts for 25,000 and 30,000 units. W 12.) Assume that Phan actually makes 28,000 units. What would be the total costs and the cost per unit at this level of activity? 0 3.) If Phan sells each unit for $35, what is Phan's magnitude of operating leverage at sales of 28,000 units? (25715000) - 250000 90 900 2800do 700000 </75 400000 700000 700.000 - 300,000 = 1.75

Answer 1

Requirement (182) 20000 25000 30000 28000 Number of Units Total Costs Fixed Costs Variable Costs Total Costs $ 300,000 $300,000 $300,000 $300,000 $ 200,000 $250,000 $300,000 $280,000 $ 500,000 $550,000 $600,000 $580,000 Cost per unit Fixed Variable Total Cost per Unit $ $ $ 15.0 $ 10.0 $ 25.0 $ 12.0 $ 10.0 $ 22.0 $ 10.0 $ 10.0 $ 20.0 $ 10.7 10.0 20.7 Requirement (3) Selling Price Less : Variable Cost Contribution Margin $ $ $ 35 (10) 25 Total Contribution Margin (28000*25) Less: Fixed Costs Net Operating Income $ 700,000 $(300,000 $ 400,000 Degree of operating Leverage : 700,000/400,000 1.75 Times Note : Please comment down for any further clarifications.

June 2020 - July 2021 - Microsoft Excel 2 Home Insert Page Layout Formulas Data Review View X fr Calculate Now Insert Function Σ AutoSum Recently Financial Logical Text Date & Lookup & Math & More Used Time - Reference - Trig. Functions Function Library A6 fox a Define Name - Trace Precedents 5 Show Formulas IP Use in Formula - Trace Dependents Error Checking Name Watch Manager in Create from Selection Remove Arrows Remove Arrows - Fu Evaluate Formula Evaluate Formula Window Defined Names Formula Auditing Calculation Calculate Sheet Options Calculation A B с D F G H 1 2 3 4 Requirement (182) Number of Units 20000 125000 30000 28000 Total Costs Fixed Costs Variable Costs Total Costs 300000 200000 =SUM(E8:59) 300000 =F6*F14 =SUM(F8:F9) 300000 =G6*G14 =SUM(G8:49) 300000 =H6*H14 =SUM(H8:H9) Cost per unit Fixed Variable Total Cost per Unit =E8/E6 =E9/E6 =SUM(E13:E14) =F8/F6 10 =SUM(F13:F14) =G8/G6 10 =SUMG13:14) =H8/H6 10 =SUM(H13:H14) Requirement (3) Selling Price Less : Variable Cost Contribution Margin 35 -10 = SUM(E18:E19) 5 6 7 7 8 9 10 11 12 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 KM Total Contribution Margin (28000*25) Less: Fixed Costs Net Operating Income =E20*28000 -300000 =SUM(E23:E24) Degree of operating Leverage : 700,000/400,000 -E23/E25 Times Note : Please comment down for any further clarifications. Sheet1467 Sheet1468 Sheet1472 Sheet1477 Sheet1480 Sheet1449 September August Sheet1068 01 Ready 8096 U