hw_solution_4

# hw_solution_4 - 4-28:Status Quo 4,000 UnitsAlternative...

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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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## This note was uploaded on 10/29/2009 for the course ACC 066 taught by Professor Kwak during the Spring '08 term at DeAnza College.

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

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