Ch 4 Solutions to Assigned Homework

# Ch 4 Solutions to Assigned Homework - Chapter 4 Solutions...

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Chapter 4 – Solutions to Assigned Homework Exercise 4–27 1. Sales (\$14 × 27,000). .................................................................. \$378,000 Variable cost (\$9.50 × 27,000). .................................................. 256,500 Total contribution margin. ................................................... \$121,500 Less: Fixed expenses. ............................................................... 126,000 Operating income. ..................................................................... \$ (4,500 ) 2. Break-even units = \$126,000 (\$14 \$9.50) - = 28,000 3. Units to earn target income = (\$126,000 + \$9,900) (\$14 \$9.50) - = 30,200 Exercise 4–28 1. Break-even units = (\$131,650 + \$18,350) (\$2.45 \$1.65) - = \$0.80 \$150,000 = 187,500 2. Unit variable cost includes all variable costs on a unit basis: Direct materials. ................................................................... \$0.27 Direct labor. .......................................................................... 0.58 Variable overhead. ............................................................... 0.63 Variable selling. .................................................................... 0 .17 Unit variable cost. ................................................................ \$1 .65 Unit variable manufacturing cost includes the variable costs of production on a unit basis: Direct materials. ................................................................... \$0.27 Direct labor. .......................................................................... 0.58 Variable overhead. ............................................................... 0 .63 Unit variable manufacturing cost. ....................................... \$1 .48 Unit variable cost is used in CVP because it includes all variable costs, not just manufacturing costs. 3. Units to earn \$12,600 = (\$131,650 + \$18,350 + \$12,600) (\$2.45 \$1.65) - = 203,250 4. Sales revenue to earn \$12,600 = 203,250 × \$2.45 = \$497,962.50

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Exercise 4–29 1. Break-even units = (\$231,650 + \$315,390) (\$6.28 \$3.65) - = 208,000 2. Expected sales in units. ............................................................ 380,000 Break-even units. ....................................................................... (208,000 ) Margin of safety (in units). ........................................................ 172,000 3. Expected sales revenue (\$6.28 × 380,000). .............................. \$2,386,400 Break-even sales revenue*. ...................................................... 1,306,240
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Ch 4 Solutions to Assigned Homework - Chapter 4 Solutions...

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