### Shipping Costs and Contribution Margin Analysis#### 1. High-Low Method for Shipping CostsTo determine a cost formula for shipping costs, the high-low method is used. This involves the following steps:- **Identify High and Low Activity Levels:** - **High Level of Activity:** - Total Cost: $100,000 - Units: 22,500 - **Low Level of Activity:** - Total Cost: $72,000 - Units: 12,500- **Calculate the Change in Costs and Activity:** - Change in Cost: $28,000 - Change in Activity: 10,000 units- **Determine Variable Cost per Unit:** - Variable Cost per Unit = Change in Cost / Change in Activity - Variable Cost per Unit = $2.80- **Calculate Fixed Costs:** - Total Cost at High Level of Activity: $100,000 - Total Variable Cost Element: $63,000 - Total Fixed Cost: $37,000#### 2. Contribution Margin Income Statement for Quarter 1 of 2024**Jay Corporation****Budgeted Income Statement****For 2024, Quarter 1**- **Sales:** $816,000- **Variable Expenses:** - Cost of Goods Sold: $493,000 - Sales Commissions: $77,520 - Shipping Expenses: $27,000- **Total Variable Expenses:** - **Contribution Margin:** $218,480- **Fixed Expenses:** - Administrative Salaries: $45,000 - Advertising Expense: $36,000 - Depreciation: $13,000 - Shipping Expense: $11,000- **Total Fixed Expenses:** - **Net Operating Income:** $113,480This outline illustrates how to use the high-low method to establish a cost formula for shipping, and shows a detailed contribution margin income statement, providing insights into the financial structure and operational efficiency during the specified period. **Jay Corporation: Contribution Income Statement Preparation****Overview:**Jay Corporation is preparing contribution income statements for internal planning.**Budgeted Information for Quarter 1 of 2024:**- Sales in units: 17,000- Sales price per unit: $48.00**Cost Patterns Analysis:**- Cost of Goods Sold (per unit): $29.00- Sales Commissions (per dollar of sales): 9.50%- Administrative Salaries (per quarter): $45,000- Rent Expense (per quarter): $27,000- Depreciation Expense (per quarter): $36,000**Shipping Costs Analysis:**Shipping has been classified as a mixed cost, combining fixed and variable components. **Total Shipping Costs and Units Overview:**| Year | Quarter | Total Cost | Units ||------|----------|------------|--------|| 2022 | Quarter 1| $67,000 | 12,500 || | Quarter 2| $94,000 | 21,000 || | Quarter 3| $89,500 | 18,300 || | Quarter 4| $92,500 | 20,500 || 2023 | Quarter 1| $72,500 | 13,700 || | Quarter 2| $79,300 | 18,100 || | Quarter 3| $84,000 | 14,300 || | Quarter 4| $100,000 | 22,500 |The table reveals variations in shipping costs and units over eight quarters, indicating a mixed cost behavior influenced by both volume and fixed elements.

Income statement is the one which is prepared by the entity to show the amount of operating income…

1 2 Jay Corporation has decided to prepare contribution income statements for internal planning. 3 4 Budgeted information for Quarter 1 of 2024: 5 Sales in units 6 Sales price per unit 7 8 9 10 11 After analyzing expenses, the company has determined the following cost patterns. Cost of Goods Sold (per unit) $29.00 Sales Commissions (per dollar of sales) 9.50% Administrative Salaries (per quarter) 12 Rent Expense (per quarter) 13 Depreciation Expense (per quarter) 14 2022 17,000 $48.00 15 Shipping has been determined to be a mixed cost with the following total costs and units: 16 17 18 Quarter 1 19 Quarter2 20 Quarter 3 21 Quarter 4 22 2023 23 24 25 26 Quarter 1 Quarter2 Quarter 3 Quarter 4 $45,000 $27,000 $36,000 Total Cost $67,000 $94,000 $89,800 $92,600 $72,500 $80,000 $84,000 $100,000 Units 12,500 21,000 13,800 20,000 13,700 14,000 14,300 22,500

1 2 Jay Corporation has decided to prepare contribution income statements for internal planning. 3 4 Budgeted information for Quarter 1 of 2024: 5 Sales in units 6 Sales price per unit 7 8 9 10 11 After analyzing expenses, the company has determined the following cost patterns. Cost of Goods Sold (per unit) $29.00 Sales Commissions (per dollar of sales) 9.50% Administrative Salaries (per quarter) 12 Rent Expense (per quarter) 13 Depreciation Expense (per quarter) 14 2022 17,000 $48.00 15 Shipping has been determined to be a mixed cost with the following total costs and units: 16 17 18 Quarter 1 19 Quarter2 20 Quarter 3 21 Quarter 4 22 2023 23 24 25 26 Quarter 1 Quarter2 Quarter 3 Quarter 4 $45,000 $27,000 $36,000 Total Cost $67,000 $94,000 $89,800 $92,600 $72,500 $80,000 $84,000 $100,000 Units 12,500 21,000 13,800 20,000 13,700 14,000 14,300 22,500

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Similar questions

A7 please help......
Accounting This is the budget for the year ended 30 April 2021 for company XTZ Total production & sales = 2400units Selling price per unit = $1200 Variable manufacturing costs : Direct labour = $192 ; Direct material = $288 ; Overheads = $96 Fixed manufacture overheads = $216,960 Other : Fixed marketing & admin cost = $144,000 Sales commission = 5% 1) Calculate the total marginal income and net profit & loss if all units are sold 2) Use the marginal income ratio to work out the break even value 3) Calc the new total marginal income & net profit &loss if an increase of $50,000 in advertising costs increases sales by 200units 4) If the company earns a net profit of $298,920 ; How many units were sold 5) If expected sales volume is 2400units, what is the sales price per unit which will allow the company to break even?
4.4 Prepare a direct labor budget for each of the upcoming five years. Labor = $8
Please do not give solution in image format thanku
Please help me with show all calculation thanku
Please do not give solution in image format thanku
Solve requriement a and b
PROBLEM 10 The controller of Palma Company is examining the following budgeted and actual income statements for its principal product for 2021. All amounts are in thousands of pesos. Budget P4,800.0 1,668.0 P3,120.0 Actual P4,967.2 1,780.8 P3,186.4 Sales Variable cost Contribution margin The budgeted unit selling price is P8.00. Actual unit volume is 6% over budget, but the actual selling price is below budget. Per-unit variable costs are incurred as budgeted. Determine the sales price variance and sales volume variance.
please help me, thank you
1. wHAT IS THE CASH PAYMENTS IN QUARTER 3 2. HOW MUCH IS THE TOTAL MANUFACTURING OVERHEAD BUDGET 2023?
3.1 REQUIRED Calculate the following from the information given below: 3.1.1 Break-even quantity. 3.1.2 Break-even value using the marginal income 3.1.3 Margin of safety 3.1.4 Total Marginal Income and Net Profit/Loss if the sales price is reduced to R90 per unit.INFORMATION Dynamo Ltd manufactures calculators. The following information was extracted from the budget for the year ended 31 December 2023: Sales volume 20 000 units Selling price per unit R100 Variable manufacturing cost per unit R50 Variable marketing cost per unit 10% of the unit selling price Fixed manufacturing cost R400 000 Fixed administration and marketing costs R200 000
am. 40.