Question 1: The manufacturing cost of Lancer Industries for three months of the year are provided below:
|
|
Total Cost
|
Production
|
|
April
|
$ 61,900
|
1,200 Units
|
|
May
|
80,920
|
1,800
|
|
June
|
100,300
|
2,400
|
Using the high-low method, the variable cost per unit, and the total fixed costs are:
Question 2: Please use the following for Problems:
Mavis Company uses the total cost concept of applying the cost-plus approach to product pricing. The costs and expenses of producing and selling 38,400 units of Product E are as follows:
|
Variable costs:
|
|
|
Direct materials
|
$ 4.70
|
|
Direct labor
|
2.50
|
|
Factory overhead
|
1.90
|
|
Selling and administrative expenses
|
2.60
|
|
Total
|
$ 11.70
|
|
Fixed costs:
|
|
|
Factory overhead
|
$80,000
|
|
Selling and administrative expenses
|
14,000
|
Mavis desires a profit equal to a 14% rate of return on invested assets of $640,000
A. Determine the amount of desired profit from the production and sale of Product E.
B. Determine the total costs and the cost amount per unit for the production and sale of 38,400 units of Product E.
C. Determine the markup percentage for Product E.
D. Determine the selling price of Product E.
Question 3: Given the following cost and activity observations for Wondrous Company’s utilities, use the high-low method to calculate Wondrous’ variable utilities costs per machine hour.
|
|
Cost
|
Machine Hours
|
|
March
|
$3,100
|
|
15,000
|
|
April
|
2,700
|
|
10,000
|
|
May
|
2,900
|
|
12,000
|
|
June
|
3,500
|
|
18,000
|
Question 4: Given the following cost and activity observations for Johnson Company’s utilities, use the high-low method to calculate Johnson’s fixed costs per month.
|
|
Cost
|
Machine Hours
|
|
January
|
$52,600
|
|
20,000
|
|
February
|
75,100
|
|
29,000
|
|
March
|
57,000
|
|
22,000
|
|
April
|
64,000
|
|
24,500
|
Question 5: Ingram Co. manufactures office furniture. During the most productive month of the year, 3,500 desks were manufactured at a total cost of $84,400. In its slowest month, the company made 1,100 desks at a cost of $46,000. Using the high-low method of cost estimation, total fixed costs are..?
Question 6: If fixed costs are $1,400,000, the unit selling price is $220, and the unit variable costs are $120, what is the amount of sales required to realize an operating income of $200,000?
Question 7: If fixed costs are $750,000 and variable costs are 70% of sales, what is the break-even point (dollars)?
Question 8: If fixed costs are $250,000, the unit selling price is $105, and the unit variable costs are $65, what is the break-even sales (units)?
Question 9: If sales are $820,000, variable costs are $524,800, and operating income is $260,000, what is the contribution margin ratio?
Question 10: If sales are $425,000, variable costs are 63% of sales, and operating income is $50,000, what is the contribution margin ratio?
Question 11: If fixed costs for a company are $65,000 and variable costs are 20% of sales, what do total sales need to be to achieve a target net income of $35,000?
Question 12: A company's current sales are $400,000 at a volume of 10,000 units. Fixed costs are $120,000 and variable costs are $30 per unit. What is the company's breakeven sales volume in units?