DB Week 3, Schultz

DB Week 3, Schultz - BUS5431 Managerial Accounting Week 3...

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03/27/2011 BUS5431 Managerial Accounting Week 3 Homework Chapter 4 Exercise 5 ($20,500 - $8,500) ÷ (900,000 - 300,000) = $.02 per copy of variable repair cost $8,500 - ($.02 x 300,000) = $2,500 per month of fixed repair cost. Exercise 8 a. The only variable costs are staff salaries and office supplies. In this case, variable costs are $555 per hire [($33,000 + $300) ÷ 60 hires]. Fixed costs are $10,000 (manager salary and rent). b. The estimated cost for June with 70 new hires is: $10,000 + ($555 × 70) = $48,850. c. The incremental cost associated with 10 more employees is $5,550 (i.e., $555 × 10). Exercise 12 a. Given that variable cost per dollar of sales is $.40, the contribution margin per dollar of sales is .60. The break-even point equals fixed cost divided by the contribution margin ratio. Thus, the break-even point is 1,200,000 (300,000 ÷ .60 = 1,200,000). b. ($300,000 + $60,000) ÷ $.60 = 600,000 c. The expected level of profit is: ($1,000,000 × $.60) - 300,000 = $300,000
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This note was uploaded on 05/15/2011 for the course BUS 5541 taught by Professor Collins during the Spring '11 term at FIT.

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DB Week 3, Schultz - BUS5431 Managerial Accounting Week 3...

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