CVP_solutions - Ex 7-34 pg283 Month Jan Feb Mar Apr May...

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Ex 7-34 pg283 Regression Month Hours-- X Utility Cost--Y Jan 550 1620 Feb 600 1700 Mar 700 1900 Apr 500 1600 May 450 1350 June 400 1300 Intercept 501 Fixed Cost Slope 2.02 Variable Cost per hour Coef icient of determination 0.9517760746 July Cost 1107 High Low Method Variable Cost per hour 2 Variable Cost for 700 hours 1400 Total Cost 1900 Fixed Cost 500 July cost 1100 Ex 8-28 1 Traditional Income Statement $ Sales 2,000,000 Less: COGS- Mftg cost 1,500,000 Gross Margin 500,000 Less: Operating expenses Sel ing expenses 150,000 Administrative expenses 150,000 300,000 Net Income 200,000 Contribution Income Statement Sales 2,000,000 2200000 Less: Variable expenses Variable Manufacturing 1,000,000 Variable Sel ing 100,000 Variable Admin 30,000 1,130,000 1243000 Contribution 870,000 957000 Less: Fixed expenses Fixed Manufacturing 500,000 Fixed Sel ing 50,000 Fixed Admin 120,000 670,000 670,000 Net Income 200,000 287,000 2 Operating Leverage Factor Contribution Margin 870,000 (At 1,000,000) Net income 200,000 4.35 3Increase in Net income 10%*4.35or 87000/200000 43.5% 43.5 % Ex 8-41 Contribution per unit $5.20 Contribution Margin Ratio 20.80% 1 BEP in units Fixed Costs 468000 CPU 5.20 90000 units 2 BEP in sales dol ars Fixed Costs 468000 Contribution Margin ratio 20.80% $2,250,000 or 2250000 3Sales to earn $260,000 140,000 units 4Margin of Safety Budgeted sales- BEP Sales $750,000 5Revised BEP Increase in Labor cost 0.4 New contribution $4.80 BEP 468000 4.80 97500 units 6New sel ing price (x-20.2)/ x = .208 x 25.505 Ex 8-49 1 Closing of Mal Store Loss of contribution from Downtown Store 36000 Loss of contribution from Mal Store 4800 40800 Less: Saving in fixed costs 30000 Decrease in Operating Income 10800 2 Increase in Contribution 3600 Increase in monthly promotional expenses 5000 Decrease in Operating Income 1400 3 Items sold Other items at variable cost Sales 60,000 60,000 Less :Variable Cost 60,000 24,000 Contribution 0 36,000 If items sold at variable expenses were eliminated,
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CVP_solutions - Ex 7-34 pg283 Month Jan Feb Mar Apr May...

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