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Mastery Problem: Cost-Volume-Profit Analysis Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. Total Lumber Utilities Cost Cost 9,000 shelves $99,000 Total Total Machine Depreciation Cost $11,850 $120,000 18,000 shelves 198,000 22,200 120,000 36,000 shelves 396,000 42,900 120,000 45,000 shelves 495,000 53,250 120,000 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these. Variable Cost Mixed Cost Fixed Cost Units Produced Lumber Utilities Depreciation 2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0". Recall that, for N = Number of Units Produced, Total Costs = (Variable Cost Per Unit x N) + Fixed Cost. Complete the following table with your answers. Round variable portion of cost (per unit) answers to two decimal places. Cost Lumber Utilities Depreciation Fixed Portion of Cost Variable Portion of Cost (per Unit)

Mastery Problem: Cost-Volume-Profit Analysis Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. Total Lumber Utilities Cost Cost 9,000 shelves $99,000 Total Total Machine Depreciation Cost $11,850 $120,000 18,000 shelves 198,000 22,200 120,000 36,000 shelves 396,000 42,900 120,000 45,000 shelves 495,000 53,250 120,000 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these. Variable Cost Mixed Cost Fixed Cost Units Produced Lumber Utilities Depreciation 2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0". Recall that, for N = Number of Units Produced, Total Costs = (Variable Cost Per Unit x N) + Fixed Cost. Complete the following table with your answers. Round variable portion of cost (per unit) answers to two decimal places. Cost Lumber Utilities Depreciation Fixed Portion of Cost Variable Portion of Cost (per Unit)

FINANCIAL ACCOUNTING
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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**Mastery Problem: Cost-Volume-Profit Analysis** **Cost Behavior** Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. | Units Produced | Lumber Cost | Total Utilities Cost | Total Machine Depreciation Cost | |----------------|-------------|----------------------|---------------------------------| | 9,000 shelves | $99,000 | $11,850 | $120,000 | | 18,000 shelves | 198,000 | 22,200 | 120,000 | | 36,000 shelves | 396,000 | 40,200 | 120,000 | | 45,000 shelves | 495,000 | 53,250 | 120,000 | 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these. - **Lumber**: Variable Cost - **Utilities**: Mixed Cost - **Depreciation**: Fixed Cost 2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0". Recall that, for N = Number of Units Produced, Total Costs = (Variable Cost Per Unit x N) + Fixed Cost. Complete the following table with your answers. Round variable portion of cost (per unit) answers to two decimal places. | Cost | Fixed Portion of Cost | Variable Portion of Cost (per Unit) | |---------------|-----------------------|-------------------------------------| | Lumber | $0 | | | Utilities | | | | Depreciation | $120,000 | | Note: Fill in the fixed and variable portions based on the data provided, recognizing patterns in cost changes relative to units produced.
Transcribed Image Text:**Mastery Problem: Cost-Volume-Profit Analysis** **Cost Behavior** Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. | Units Produced | Lumber Cost | Total Utilities Cost | Total Machine Depreciation Cost | |----------------|-------------|----------------------|---------------------------------| | 9,000 shelves | $99,000 | $11,850 | $120,000 | | 18,000 shelves | 198,000 | 22,200 | 120,000 | | 36,000 shelves | 396,000 | 40,200 | 120,000 | | 45,000 shelves | 495,000 | 53,250 | 120,000 | 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these. - **Lumber**: Variable Cost - **Utilities**: Mixed Cost - **Depreciation**: Fixed Cost 2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0". Recall that, for N = Number of Units Produced, Total Costs = (Variable Cost Per Unit x N) + Fixed Cost. Complete the following table with your answers. Round variable portion of cost (per unit) answers to two decimal places. | Cost | Fixed Portion of Cost | Variable Portion of Cost (per Unit) | |---------------|-----------------------|-------------------------------------| | Lumber | $0 | | | Utilities | | | | Depreciation | $120,000 | | Note: Fill in the fixed and variable portions based on the data provided, recognizing patterns in cost changes relative to units produced.
**Contribution Margin** Review the contribution margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statements. Complete the following table from the data provided on the income statements. Each company sold 82,800 units during the year. | | Cover-to-Cover Company | Biblio Files Company | |-----------------------------------|-------------------------|----------------------| | **Contribution margin ratio (percent)** | _____ % | _____ % | | **Unit contribution margin** | $ _____ | $ _____ | | **Break-even sales (units)** | _____ | _____ | | **Break-even sales (dollars)** | $ _____ | $ _____ |
Transcribed Image Text:**Contribution Margin** Review the contribution margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statements. Complete the following table from the data provided on the income statements. Each company sold 82,800 units during the year. | | Cover-to-Cover Company | Biblio Files Company | |-----------------------------------|-------------------------|----------------------| | **Contribution margin ratio (percent)** | _____ % | _____ % | | **Unit contribution margin** | $ _____ | $ _____ | | **Break-even sales (units)** | _____ | _____ | | **Break-even sales (dollars)** | $ _____ | $ _____ |
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