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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