Problem 11-2

Problem 11-2 - New fixed costs $200,000 Income from...

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Problem 11-2 Kristin VanStrate Battonkill Company Sales $16,920,000 $150.00 Variable COGS $3,600,000 100% $31.91 Variable Selling $1,500,000 42% $13.30 Variable administrative $540,000 15% $4.79 Total variable $5,640,000 $50.00 Contribution margin $11,280,000 313% $100.00 Fixed COGS $2,400,000 $21.28 Fixed Selling $1,500,000 $13.30 Fixed administrative $1,260,000 $11.17 Total fixed $5,160,000 $45.74 Income from operations $6,120,000 $54.26 Breakeven in units 51,600 With Expansion Sales $18,420,000 Variable COGS Err:522 ### Variable Selling Err:522 ### Variable administrative Err:522 ### Contribution margin Err:522 ### Fixed COGS $2,400,000 Fixed Selling $1,500,000 Fixed administrative $1,260,000
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Unformatted text preview: New fixed costs $200,000 Income from operations Err:522 Breakeven in units (expansion) 107,200 sales needed to reach 2010 target 229,600 With Expansion Sales $- Variable COGS Err:522 21% Variable Selling Err:522 9% Variable administrative Err:522 3% Contribution margin Err:522 67% Fixed COGS $2,400,000 Fixed Selling $1,500,000 Fixed administrative $1,260,000 New fixed costs $200,000 Income from operations $5,920,000 8. When adjusting for the expansion I don't think the fixed costs will change. When there is more activity then the variable cost will rise. I think they should sell more stuff before expanding....
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This note was uploaded on 02/23/2012 for the course ACC 101 taught by Professor Jeff during the Spring '12 term at Lansing.

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