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problem 5-20A

# problem 5-20A - Y=mx b Y=4x 4800 = 4*7000 4800 = 32,800...

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Problem 5-20A Highest activity was in May and it was 7,400 and salaries was \$34,400 Lowest activity was in April and it was 6,500 and \$30,800 Month Sales Salaries Highest activity 7400 34400 Lowest activity 6500 30800 change 900 3600 Variable cost = change in cost /change in activity = 3600/900 = 4 Fixed cost element = total cost – var cost element = 34,400 – (3*7,400) = 4800 Part 2. Salaries and Comission
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Unformatted text preview: Y=mx + b Y=4x + 4800 = 4*7000 + 4800 = 32,800 Variable cost = 4* 7000 = 28,000 Fixed cost = 4800 Part 3. sales in units 7000 Sales Revenue 280,000 Less: Variable Exp: COGS 84000 Shipping 72000 Salaries 28000 184000 Contribution margin 96,000 Less: Fixed exp: advertizement 5000 Salaries 4800 insurance 4000 depreciation 2500 16300 Net operating income 79,700...
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