114,500 3. Kyler Company incurred the following costs in August when they produced 9,000 units! Units Produced August 9,000 September 15,000 October 12.900 43.08 9.500 Variable Costs Fixed Costs Mixed Costs Total Costs 30,000 49.500 30.000 117,500 SO,000 9.500 39.000 152,500 During September they produced 15,000 units and incurred $152,500 in total costs. a) Calculate the variable costs, fixed costs and mixed costs incurred in September using the table above. b) Use the high-low method to calculate the cost formula for mixed costs. 152,500 - 117,500 = 5.8 15,000-9.000 +C = f( + VR (unils) C) If the activity level is expected to be 12,900 units in October, what amount of total costs would be expected? (Write answer in table.) 4. Easy Ethanol forecasts sales of 75,000 gallons of bio-fuel will be sold in December. To make one unit of finished bio-fuel, seven pounds of corn is required. Actual beginning and desired ending inventories of of corn and finished goods are: Raw Material-Com (Pounds) Finished goods- Bio-Fuel (Gallons) December 1st (Actual) 91,400 8,500 December 31st (Desired) 86,400 9,600 a. Calculate the number of gallons of bio-fuel to be produced in December Gallons of Bio-Fuel Beginning inventory Production Goods available for sale Ending inventory Units sold b. Calculate the number of pounds of corn to be purchased to meet December's production. Pounds of Com Beginning inventory Purchases Raw material available for use Ending inventory Raw material used in production Additional items to Know: Be able to identify expenses based on cost behavior (Variable, Fixed, or Mixed) (Ch. 12) 1. Joe makes and sells a single product. The current selling price is $28 per unit. Variable costs are $17 per unit, and fixed expenses total $60,000 per month. Sales volume for July totaled 13,000 units CM = a. Calculate the operating income for July. REV Volume Per Unit 1 % 13,000 $28 13,000 13,000 Revenue Variable Expense Contribution Margin Fixed Expense Operating Income Total 2 21,000) 361.000 (143 000) (60,000) $93,000 0 32 364,000 = 39 28-17-9 b. Calculate the break-even point in: (1.) units sold: fixed exp. 10,000 vol in units at BE- $5455 cm/unit (2.) total revenues: +R - fixed exp. (M TOHO 60,000 c. Joe is considering the use of robotic equipment. If this were done, variable costs would drop to $9.00 per unit, but fixed expenses would increase to $100,000 per month (1.) Calculate operating income at a volume of 15,000 units per month with the new cost structure. New Product Per Unit New Prod. Tot. Volume % Revenue Variable Expense Contribution Margin Fixed Expense Operating Income (2.) Calculate the break-even point in units with the new cost structure
