Exercise 5A-3 (Static) Cost Behavior; High-Low Method [LO5-10]Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven105,000 kilometers during a year, the average operating cost is 11.4 cents per kilometer. If a truck is driven only 70,000 kilometersduring a year, the average operating cost increases to 13.4 cents per kilometer.Required:1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated withthe fleet of trucks.ok2. Express the variable and fixed costs in the form Y = a + bX.3. If a truck were driven 80,000 kilometers during a year, what total operating cost would you expect to be incurred?atComplete this question by entering your answers in the tabs below.ntRequired 1Required 2Required 3Express the variable and fixed costs in the form Y = a + bX. (Do not round your intermediate calculations. Round the Variablecost per kilometer to 3 decimal places.)ncesY =< Required 1Required 3>( Prev7 of 7Next >... A ezto.mheducation.comM Question 7 - Chapt.Mail - Thompsón, A.P Forgot Your Userna...Pro's Touch Landsc.A AssignQuestionsEQUIRED Assignment Part 2 - Due 10/03 . AHelpSavedExercise 5A-3 (Static) Cost Behavior; High-Low Method (LO5-10]Hoi Chong Transport, Ltd., operates a fleet of delivery trucks in Singapore. The company has determined that if a truck is driven105,000 kilometers during a year, the average operating cost is 11.4 cents per kilometer. If a truck is driven only 70,000 kilometersduring a year, the average operating cost increases to 13.4 cents per kilometer.Required:1. Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associated withthe fleet of trucks.2. Express the variable and fixed costs in the form Y = a + bX.3. If a truck were driven 80,000 kilometers during a year, what total operating cost would you expect to be incurred?Complete this question by entering your answers in the tabs below.Required 1Required 2Required 3Using the high-low method, estimate the variable operating cost per kilometer and the annual fixed operating cost associatedwith the fleet of trucks. (Do not round your intermediate calculations. Round the Variable cyst per kilometer to 3 decimalplaces.)Variable costper kilometerFixed costper yearRequired 1Required 2>< Prev7 of 7Next >MacBook Air

High Low Method: The high-low approach is used to calculate the variable and fixed costs of a…

Answered: Hoi Chong Transport, Ltd., operates a…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Current operating income for Bay Area Cycles Company is $26,000. Selling price per unit is $100, the contribution margin ratio is 25%, and fixed expense is $104,000. Required: 1. Calculate Bay Area Cycle's per unit variable expense and contribution margin. How many units are currently being sold? 2. How many additional unit sales would be necessary to achieve operating income of $65,000? Complete this question by entering your answers in the tabs below. Required 1 Required 2 Calculate Bay Area Cycle's per unit variable expense and contribution margin. How many units are currently being sold? Revenue Variable expense Contribution margin Fixed expense Operating income $ Per Unit 100.00 Volume
(1) A company sells its products for $50 per unit. It has annual fixed cost of $300,000 and variable costs of $20 per unit. The company has a capacity to make 100,000 units per year. (a) How many units must be sold to breakeven? (b) What is the percentage of capacity at breakeven? (c) What is the profit at 25,000 units?
Sheldon's Company is the exclusive distributor for an automotive product that sells for $56.00 per unit and has a CM ratio of 30%. The company's fixed expenses are $411,600 per year. The company plans to sell 29,300 units this year. Required: Assume that by using a more efficient shipper, the company is able to reduce its variable expenses by $5.60 per unit. What is the company's new break-even point in unit sales and in dollar sales? New break-even point in unit sales New break-even point in dollar sales
Ritchie Manufacturing Company makes a product that it sells for $140 per unit. The company incurs variable manufacturing costs of $73 per unit. Variable selling expenses are $11 per unit, annual fixed manufacturing costs are $468,000, and fixed selling and administrative costs are $271,200 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the equation method. b. Use the contribution margin per unit approach. c. Use the contribution margin ratio approach. d. Prepare a contribution margin income statement for the break-even sales volume. Complete this question by entering your answers in the tabs below. Req A to C Req D Determine the break-even point in units and dollars using the equation method, the contribution margin per unit approach and the contribution margin ratio approach. a. Break-even point in units a. Break-even point in dollars b. Contribution margin per unit b. Break-even point in units #
2. Sooner Industries charges a price of $82 and has fixed cost of $325,000. Next year, Sooner expects to sell 14,800 units and make operating income of $187,000. What is the variable cost per unit? What is the contribution margin ratio? Note: Round your variable cost per unit answer to the nearest cent. Enter the contribution margin ratio as a percentage, rounded to two decimal places. Line Item Description Answer Variable cost per unit $fill in the blank 2 per unit Contribution margin ratio fill in the blank 3 %
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Management believes it can sell a new product for $9.00. The fixed costs of production are estimated to be $7,000, and the variable costs are $3.40 a unit. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs. Round your answers to the nearest dollar. Enter zero if necessary. Use a minus sign to enter losses, if any. Quantity Total Revenue Variable Costs Fixed Costs Total Costs Profits (Losses) 0 $ $ $ $ $ 500 $ $ $ $ $ 1,000 $ $ $ $ $ 1,500 $ $ $ $ $ 2,000 $ $ $ $ $ 2,500 $ $ $ $ $ 3,000 $ $ $ $ $ Determine the break-even level using the above table and use the Exhibit 19.5 to confirm the break-even level of output. Round your answers for the break-even level to the nearest whole number. Round your answers for the fixed costs, variable costs, total costs,…
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Lindon Company is the exclusive distributor for an automotive product selling for $22.00 per unit with a CM ratio of 30%. The company's fixed expenses are $105,600 per year and it plans to sell 17,400 units this year. Required: 1. What are the variable expenses per unit? Note: Round your "per unit" answer to 2 decimal places. 2. What is the break-even point in unit sales and in dollar sales? 3. What amount of unit sales and dollar sales is required to attain a target profit of $39,600 per year? 4. Assume by using a more efficient shipper, the company can reduce its variable expenses by $2.20 per unit. What is the company's new break-even point in unit sales and dollar sales? What dollar sales are required to attain a target profit of $39,600? 1. Variable expense per unit 2. Break-even point in units 2. Break-even point in dollar sales 3. Unit sales needed to attain target profit 3. Dollar sales needed to attain target profit 4. New break-even point in unit sales 4. New break-even point…
Super Sales Company is the exclusive distributor for a high-quality knapsack. The product sells for $80 per unit and has a CM ratio of 40%. The company's fixed expenses are $360,000 per year. The company plans to sell 13,000 knapsacks this year. Required: 1. What are the variable expenses per unit? Variable expenses per unit 2. Use the equation method for the following: a. What is the break-even point in units and in sales dollars? Break-even point in units Break-even point in sales dollars

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