Question

$181,000 per quarter 6% of sales $10,100 per quarter 27000 $171,000 30.000 $191,000 28.000 %181,000 31,000 $196,000 S 243

Answer 1

Ques 1
	Shipping
	Units Sold	Expense
High activity level	45000	243000
Low activity level	27000	171000
Change	18000	72000
Variable cost per unit	$                     4	(72000/18000)
Fixed cost element	$           63,000
($171000-(27000*4))
Y=$63000 + $4.00 Y

Ques 2
Sales	(37000*$61)	$ 2,257,000
Variable expenses
Cost of goods sold (37000*$31)	$     1,147,000
Sales comission(2257000*6%)	$        135,420
Shipping expense(37000*$4)	$        148,000
Total variable expenses		$ 1,430,420
Contribution margin		$     826,580
Fixed expenses
Advertising expense	$        181,000
shipping expense	$           63,000
Administrative expense	$           91,000
Insurance expense	$           10,100
Depriciation expense	$           61,000
total fixed expense		$     406,100
Net operating income		$     420,480