PROBLEM SET BProblem 21-1BCost estimation using high-low method P1Sun Co.'s monthly data for the past year follow. Management wants to use these data to predict future variable and fixed costs.Units Sold1....2....195.000125,0003....105,0004.... 155,0005.... 95,0006.... 215,000MonthTotal Cost$ 97,00087,00073,00089,00081,000110,000Month7 ...8...9...10 ...11 ...12 ...Units Sold145,000185,000135,00085,000175,000115,000Total Cost$ 93,000105,00085,00058,00095,00079,000Required1. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method.2. Use the answers for variable and fixed costs from part 1 to predict future total costs when sales volume is (a) 100,000 units and (b) 170,000 units.Analysis Componentpage 7993. Use these data to prepare a scatter diagram. Draw an estimated line of cost behavior and determine whether the cost appears to be variable, fixed, or mixed.

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FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Break-even sales and cost-volume-profit chart For the coming year, Cleves Company anticipates a unit selling price of $98, a unit variable cost of $49, and fixed costs of $416,500. Required: 1. Compute the anticipated break-even sales (units). 416,500 units 2. Compute the sales (units) required to realize a target profit of $171,500. units 3. Construct a cost-volume-profit chart on paper, assuming maximum sales of 17,000 units within the relevant range. From your chart, indicate whether each of the following sales levels would produce a profit, a loss, or break-even. $1,166,200 $1,038,800 $833,000 $627,200 $499,800 Determine the probable operating income (loss) if sales total 13,600 units. If required, use the minus sign to indicate a loss.
Break-Even Sales and Sales to Realize a Target Profit For the current year ending October 31, Papadakis Company expects fixed costs of $400,000, a unit variable cost of $52, and a unit selling price $77. a. Compute the anticipated break-even sales (units). units b. Compute the sales (units) required to realize a target profit of $92,500. units
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Current Attempt in Progress Pharoah Company estimates that variable costs will be 55% of sales, and fixed costs will total $1,401,750. The selling price of the product is $7. Calculate the break-even point in units and dollars. Break-even point Break-even point units
Question A and D
Question 2 The following monthly data in contribution format are available for the Ross Company and its only product. Product SD: Sales Variable expenses Contribution margin Fixed expenses Net operating income Total $ $ $ $ $ 381,600 304.800 76,800 34,500 42,300 Per Unit $ 5 159 127 32 The company produced and sold 2,400 units during the month and had no beginning or ending inventories. a) What is the current operating leverage? b) Projections indicate that the market will worsen by 15% next month. What is the projected net operating income given this increase?
Breakeven analysis and target profit, taxes, what - if analysis Pome Company produces a single product: the Core. The following table provides the Core's details: Per unlt Sellingprice 10% of selling price For the upcoming 7 Labor cost. 6 Variable overhead cost. . . . . 2 Sales commissions.. .$30 Materials cost year, Pome Company expects to sell 500,000 units of the Core, have total fixed costs of $4,500,000, and face a tax rate of 30% of income. Required (a) At the expected level of unit sales, what is the after - tax income? (b)What is the breakeven unit sales of the Core? (c) The marketing manager believes that if the Core's price is cut by $2 unit, sales will increase by 10% . Is this change desirable from a financial perspective? (d)Ignore part (c) when answering this question. The production manager believes that if Pome Company rents a new machine, total manufacturing variable costs ( materials, labor, and overhead) per unit will each drop by 10% . What is the annual rent for…
PLEASE ANSWER QUESTIONS D, E & F
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High-Low Method The manufacturing costs of Ackerman Industries for the first three months of the year follow: Total Costs Units Produced January $219,590 2,710 units February 168,480 1,680 March 262,080 4,080 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. Round all answers to the nearest whole dollar. a. Variable cost per unit $ b. Total fixed cost
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