POA11e23 - CHAPTER 23Solutions COST BEHAVIOR ANALYSIS...

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Ch23 SE1 to SE3 COST BEHAVIOR ANALYSIS Chapter 23, SE 1. Hat maker A: Variable cost per derby $ 4.50 Fixed cost per derby ( $360 ÷ 15 ) 24.00 Hat maker B: Variable cost per derby $ 4.50 Fixed cost per derby ( $360 ÷ 12 ) 30.00 Chapter 23, SE 2. 1. b 2. c 3. b 4. a 5. a Chapter 23, SE 3. Activity Volume Month Level Cost High June 105 hours $4,710 Low May 93 hours 4,230 Difference 12 hours $ 480 Variable Cost per Telephone Hour = $480 ÷ 12 Hours = $40 per Hour Fixed costs for June = $4,710 – ( $40 × 105 ) = $510 Fixed costs for May = $4,230 – ( $40 × 93 ) = $510 CHAPTER 23 Solutions
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Ch23 SE4 Chapter 23, SE 4. Sales revenue $64,000 ** less Variable costs 32,000 * Contribution margin 32,000 less Fixed costs 12,000 Operating income $20,000 * $8 × 4,000 = $32,000 ** ? × 4,000 = $64,000 Sales price = $16
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Ch23 SE5 to SE7 Chapter 23, SE 5. $8.50 x = $4.30 x + $3,780 $4.20 x = $3,780 x = 900 Units Breakeven Dollars = $8.50 × 900 Units = $7,650 Chapter 23, SE 6. Breakeven Units = Fixed Costs ÷ Contribution Margin per Unit = $5,500 ÷ ( $11 $6 ) = $5,500 ÷ $5 = 1,100 Units Chapter 23, SE 7. = Contribution Margin = $10 = 0.625 Selling Price $16 Breakeven Dollars = Fixed Costs = $6,250 = $10,000 Contribution Margin Ratio 0.625 * $16 $6 = $10 Contribution Margin Ratio *
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Ch23 SE8 Chapter 23, SE 8. Selling Variable = Contribution × Sales = Weighted-Average Price Costs Margin (CM) Mix CM A $10 $4 = $6 × 0.6667 = $4.00 B $ 8 $5 = $3 × 0.3333 = 1.00 Weighted-average contribution margin $5.00 Weighted-Average Breakeven Point = $15,000 ÷ $5.00 = 3,000 Units Breakeven point for each product line: Weighted-Average Sales Breakeven Breakeven Point × Mix = Point A = 3,000 Units × 0.6667 = 2,000 Units B = 3,000 Units × 0.3333 = 1,000 Units Check: Contribution margin Product A = 2,000 × $6 = $12,000 Product B = 1,000 × $3 = 3,000 Total contribution margin $15,000 Less fixed costs 15,000 Profit ($ 0) *Rounded. * *
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Ch23 SE9 to SE10 Chapter 23, SE 9. Profit = Contribution Margin Fixed Costs = 300 ( $48 $18 ) $4,000 = 300 ( $30 ) $4,000 = $9,000 – $4,000 = $5,000 Chapter 23, SE 10. Activity Volume Month Level Cost Highest November 97 cases $21,350 Lowest December 91 cases 20,840 Difference 6 cases $ 510 Variable Cost per Case = $510 ÷ 6 Cases = $85 per Case Fixed Cost for November = $21,350 ( 97 × $85 ) = $13,105 Fixed Cost for December = $20,840 ( 91 × $85 ) = $13,105 Variable cost per case for December Direct labor $190 Variable service overhead 85 Variable cost per case $275 Fixed cost per case for December Fixed service overhead ( $13,105 ÷ 91 ) $144 *
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Ch23 E1 to E2 Chapter 23, E 1. 1. a 9. b (per car) and a (with size of fleet) 2. b 10. a 3. a 11. a 4. b 12. a 5. b 13. b 6. a 14. a 7. a 15. a 8. a 16. a Chapter 23, E 2. 1.
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POA11e23 - CHAPTER 23Solutions COST BEHAVIOR ANALYSIS...

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