hw_solution_4

hw_solution_4 - 4-28:Status Quo 4,000 UnitsAlternative 4,300

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Unformatted text preview: 4-28:Status Quo 4,000 UnitsAlternative 4,300 UnitsDifferenceRevenues.....................$ 20,000$21,050$1,050 (higher)Variable costs:Mealsa......................10,00010,750750 (higher)Administrativeb.........1,0001,000Contribution margin$ 9,000$9,300$ 300 (higher)Fixed costs...................7,0007,000Operating profit............$ 2,000$ 2,300$ 300(higher)a Variable costs per meal = ($16,000 $6,000) 4,000 units= $2.50 per unit.Alternatively, variable costs per meal: $4 ($16,000 $6,000) $16,000 = $2.50 per unit. $2.50 per unit x 300 = $750 additional cost.b No additional administrative costs according to the exercise.Alternative presentation.Per Unit300 MealsRevenues........................................................................................$3.50$1,050Variable costs:Meal costs:$4 [($16,000 $6,000) $16,000] =2.50750Contribution to operating profit.......................................................$1.00$300Accepting this order would increase operating profits by $300.4-31:a.Status Quo10,000 BottlesAlternative11,000 BottlesDifferenceSales revenue........................$60,000a$65,000b$5,000(higher)Less variable costs:...
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hw_solution_4 - 4-28:Status Quo 4,000 UnitsAlternative 4,300

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