1.

Felix & Co. reports the following information about its sales and cost of sales.

Period	UnitsSold	Cost of Sales		Period	UnitsSold	Cost of Sales
1	0	$	2,500	6	2,000	5,500
2	400		3,100	7	2,400	6,100
3	800		3,700	8	2,800	6,700
4	1,200		4,300	9	3,200	7,300
5	1,600		4,900	10	3,600	7,900

Hint: (Draw an estimated line of cost behavior using a scatter diagram offline.)

Complete the below table to calculate the fixed cost and variable cost of sales by using the high-low method.

2.

Blanchard Company manufactures a single product that sells for $140 per unit and whose total variable costs are $112 per unit. The companys annual fixed costs are $400,400.

(1)	Prepare a contribution margin income statement for Blanchard Company at the break-even point.
(2)	Assume the companys fixed costs increase by $128,000. What amount of sales (in dollars) is needed to break even?

3.

R&R Tax Service offers tax and consulting services to individuals and small businesses. Data for fees and costs of three types of tax returns follow. R&R provides services in the ratio of 3:3:4 (easy, moderate, business). Fixed costs total $24,360 for the tax season.

Type of Return	Fee Charged				Variable Cost per Return
Easy (form 1040EZ)		$	36			$	23
Moderate (form 1040)			111				68
Business			261				93

4.

Zhao Co. has fixed costs of $455,600. Its single product sells for $191 per unit, and variable costs are $124 per unit. The company expects sales of 10,000 units. Prepare a contribution margin income statement for the year ended December 31, 2015.