Exercise 2-1A
Requirement
Fixed
Variable
Mixed
a.
x
b.
x
c.
x
d.
x
e.
x
f.
x
Exercise 2-6A
Number of Units
10,000
11,000
12,000
13,000
Total costs incurred
Fixed
$
60,000
$
60,000
$
60,000
$
60,000
Variable
50,000
55,000
60,000
65,000
Total costs
$110,000
$115,000
$120,000
$125,000
Cost per unit
Fixed
$
6.00
$5.45
$5.00
$4.62
Variable
5.00
5.00
5.00
5.00
Total cost per unit
$11.00
$10.45
$10.00
$9.62
b.
The total cost per unit declines as volume increases
because the same amount of fixed cost is spread over an
increasingly larger number of units of product.
Exercise 2-13A
Income Statement
Sales Revenue (4,000 units x $150)
$600,000
Less: Variable Costs
Cost of Goods Sold (4,000 units x $80)
(320,000)
Sales Commissions (10% of Sales)
(60,000)
Shipping and Handling Expenses (4,000 units x $1)
(4,000)
Contribution Margin
216,000
a.
a.