Acct3333 Ch 3,4 in-class soln 2010

# Acct3333 Ch 3,4 in-class soln 2010 - 3-25(10-15 min.)CVP...

This preview shows pages 1–2. Sign up to view the full content.

This preview has intentionally blurred sections. Sign up to view the full version.

View Full Document
This is the end of the preview. Sign up to access the rest of the document.

Unformatted text preview: 3-25(10-15 min.)CVP exercises.1.Total CM =\$3,240,000*48% = \$1,555,200CM=Revenues – Variable Costs\$1,555,200=\$3,240,000 – Variable Costs, VC = \$1,684,800Units Sold=\$3,240,000/\$36 = 90,000Per UnitDollars%Revenues @ \$36/unit (given)\$36.00\$3,240,000100%Variable Costs \$18.72\$1,684,80052%Contribution Margin \$17.28\$1,555,20048% (g)Fixed Costs (given)\$730,000Budgeted Operating Income\$825,2002.New Fixed Costs=\$730,000 – (\$730,000*15%) = \$620,500New unit CM=42% * \$36 = \$15.12Per Unit Dollars%Revenues @ \$36/unit (given)\$36.00\$3,240,000100%Variable Costs \$20.88\$1,879,20058%Contribution Margin \$15.12\$1,360,80042% (g)Fixed Costs (given)\$620,500Budgeted Operating Income\$740,300 3. New Selling Price=\$36 * 1.1 = \$39.60New Volume=90,000 * .95 = 85,500VC=85,500 * \$18.72 = \$1,600,560Per Unit DollarsRevenues \$39.60\$3,385,800Variable Costs \$18.72\$1,600,560Contribution Margin \$20.88\$1,785,240Fixed Costs (given)\$730,000Budgeted Operating Income\$1,055,2404.Increasing the selling price results in the highest budgeted operating income of the alternatives suggested. However, this higher income is based on an assumption that volume will only be reduced by 5% if the price is increased. The company may want volume will only be reduced by 5% if the price is increased....
View Full Document

## This note was uploaded on 01/14/2011 for the course ACCT 3333 taught by Professor J.d during the Spring '08 term at Saint Mary's University Texas.

### Page1 / 5

Acct3333 Ch 3,4 in-class soln 2010 - 3-25(10-15 min.)CVP...

This preview shows document pages 1 - 2. Sign up to view the full document.

View Full Document
Ask a homework question - tutors are online