Chapter 5 Practice Problems.docx - BE5-4 Bruno Company...

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BE5-4Bruno Company accumulates the following data concerning a mixed cost, usingmiles as the activity level.Miles Driven Total CostJanuary8,000\$14,150February 7,50013,500March8,500\$15,000April8,20014,490Compute the variable- and fixed-cost elements using the high-low method.BE5-5Markowis Corp. has collected the following data concerning its maintenance costsfor the past 6 months.Units Produced Total CostJuly18,000\$36,000August32,00048,000September 36,00055,000October22,00038,000November 40,00074,500December 38,00062,000Compute the variable- and fixed-cost elements using the high-low method.BE5-6Determine the missing amounts.Unit SellingPriceUnit VariableCostsUnit ContributionMarginContribution MarginRatio1.\$640\$352(a)(b)2.\$300(c)\$93(d)3.(e)(f)\$32525%1
BE5-8Rice Company has a unit selling price of \$520, variable costs per unit of \$286, andfixed costs of \$163,800. Compute the break-even point in units using (a) themathematical equation and (b) unit contribution margin.BE5-9Presto Corp. had total variable costs of \$180,000, total fixed costs of \$110,000, andtotal revenues of \$300,000. Compute the required sales in dollars to break even.BE5-10For Flynn Company, variable costs are 70% of sales, and fixed costs are \$195,000.Management's net income goal is \$75,000. Compute the required sales in dollarsneeded to achieve management's target net income of \$75,000. (Use thecontribution margin approach.)BE5-11For Astoria Company, actual sales are \$1,000,000, and break-even sales are\$800,000. Compute (a) the margin of safety in dollars and (b) the margin of safetyratio.BE5-12Deines Corporation has fixed costs of \$480,000. It has a unit selling price of \$6,unit variable costs of \$4.40, and a target net income of \$1,500,000. Compute therequired sales in units to achieve its target net income.DO IT! 5-1Amanda Company reports the following total costs at two levels of production.2
5,000 Units 10,000 UnitsIndirect labor\$ 3,000\$ 6,000Property taxes7,0007,000Direct labor28,00056,000Direct materials 22,00044,000Depreciation4,0004,000Utilities5,0008,000Maintenance9,00011,000Classify each cost as variable, fixed, or mixed.DO IT! 5-2Westerville Company accumulates the following data concerning a mixed cost,using units produced as the activity level.Units Produced Total CostMarch 10,000\$18,000April9,00016,650May10,50018,580June8,80016,200July9,50017,100(a) Compute the variable- and fixed-cost elements using the high-low method.(b) Estimate the total cost if the company produces 9,200 units.DO IT! 5-3Cedar Grove Industries produces and sells a cell phone-operated home securitycontrol. Information regarding the costs and sales of security controls during May2017 are provided below.Unit selling price of security control \$45Unit variable costs\$22Total monthly fixed costs\$120,000Units sold8,000Prepare a CVP income statement for Cedar Grove Industries for the month of May.Provide per unit values and total values.3
DO IT! 5-5Presto Company makes radios that sell for \$30 each. For the coming year,management expects fixed costs to total \$220,000 and variable costs to be \$18 perunit.

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