Textbook Assignments - Week 3.xlsx

# Textbook Assignments - Week 3.xlsx - Exercise 20.1 Listed...

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Exercise 20.1 Listed below are nine technical accounting terms introduced in this chapter: Varaible costs Relevant range Contribution margin Break-even point Fixed costs Semivariable costs Economies of scale Sales mix Unit contribution margin Exercise 20.7 Unit sales price \$ 30 Variable cost per unit 6 Fixed costs per year 360,000 Determine the following, showing as part of your answer the formula that you used in your computation. Contribution Margin Ratio Formula: Contribution Margin Ratio= Unit Sales Price-Variable Costs per Unit Unit Sales Price Answer: Contribution Margin Ratio= 30-6 30 Contribution Margin Ratio 80% Question B: Sales Volume (in dollars) required to break even Formula: 1 Used Contribution Margin per Unit= Unit sales price - Variable cost per unit Contribution Margin per Unit= 30-6=24 Contribution Margin per Unit is \$24 Formula: 2 Used Sales Volume (in units)= Fixed costs per year Contribution Margin per Unit Sales Volume (in units)= \$360,000 Sales volume (in units) = 15,000 Each of the following statements may (or may not) describe one of these technical terms. For each statement, statement does not correctly describe any of the terms. a . The level of sales at which revenue exactly equals costs and expenses b . Costs that remain unchanged despite changes in sales volume c . The span over which output is likely to vary and assumptions about cost behavior generally remain valid d . Sales revenue less variable costs and expenses e . Unit sales price minus variable cost per unit f . The reduction in unit cost achieved from a higher level of output g . Costs that respond to changes in sales volume by less than a proportionate amount h . Operating income less variable costs MURDER TO GO! writes and manufactures murder mystery parlor games that it sells to retail stores. The follow product: Question A:

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\$24 Formula: 3 Used Sales Volume (in dollars)= Sales volume (in units) x Unit sales price Sales Volume (in dollars)= 15,000 x 30 Sales Volume in dollars 450,000 Question C: Formula Sales Volume (in dollars)= Fixed costs + Target operating income Contribution margin ratio Sales Volume (in dollars)= \$360,000+\$440,000 80% Sales Volume (in dollars) to earn \$440,000 \$1,000,000 Question D: Formula: 1 used Sales Volume (in dollars)= Sales volume (in units) x Unit sales price Sales Volume (in dollars)= 15,000 x 30 Sales Volume in dollars
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