2.

Mauro Products distributes a single product, a woven basket whose selling price is $11 per unit and whose variable expense is $10 per unit. The company's monthly fixed expense is $2,200.

Required:

1. Calculate the company's break-even point in unit sales.

2. Calculate the company's break-even point in dollar sales.(Do not round intermediate calculations.)

3. If the company's fixed expenses increase by $600, what would become the new break-even point in unit sales?In dollar sales?(Do not round intermediate calculations.)

3.

Engberg Company installs lawn sod in home yards. The company's most recent monthly contribution format income statement follows:

Amount Percent of Sales

Sales $131,000 100%

Variable expenses 52,400 40%

Contribution margin 78,600 60%

Fixed expenses 19,000

Net operating income $59,600

Required:

1. What is the company's degree of operating leverage?(Round your answer to 2 decimal places.)

2. Using the degree of operating leverage, estimate the impact on net operating income of a 20% increase in sales.(Do not round intermediate calculations. Round your percentage answer to 2 decimal places (i.e 0.1234 should be entered as 12.34)

3. Construct a new contribution format income statement for the company assuming a 20% increase in sales.

4.

Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint:One way to find the missing amounts would be to make contribution format income statement for each case, enter the known data, and then compute the missing items.)

Required:

a. Assume that only one product is being sold in each of the four following case situations:

b. Assume that more than one product is being sold in each of the four following case situations:

(For all requirements, Loss amounts should be indicated by a minus sign.)

Answer question by entering your answers in the tabs below.

• Required A
• Required B

Assume that only one product is being sold in each of the four following case situations:

A.

Case#1 Case #2 Case #3 Case #4

Unit sold 9,900 19,300 4,000

Sales $346,500 $360,000 $132,000

Variable expenses 118,800 270,200

Fixed expenses 96,000 161,000 74,000

Net operating income (loss) $(2,600) $90,700 $(10,000)

Contribution margin per unit $11 $9

B.

Case #1 Case #2 Case #3 Case #4

Sales $446,000 $203,000 $291,000

Variable expenses 140,070 84,390

Fixed expenses 57,000 474,000

Net operating income (loss) $60,400 $120,720 $(21,390)

Contribution margin ratio (percent) 40% % 84% %

5.

Miller Company's contribution format income statement for the most recent month is shown below:

Total Per Unit

Sales (32,000 units) $288,000 $9.00

Variable expenses 192,000 6.00

Contribution margin 96,000 $3.00

Fixed expenses 49,000

Net operating income $47,000

Required:

(Consider each case independently):

1. What is the revised net operating income if unit sales increase by 20%?

2.What is the revised net operating income if the selling price decreases by $1.40 per unit and the number of units sold increases by 17%?

3. What is the revised net operating income if the selling price increases by $1.40 per unit, fixed expenses increase by $9,000, and the number of units sold decreases by 3%?

4. What is the revised net operating income if the selling price per unit increases by 20%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 6%?

6.

The Hartford Symphony Guild is planning its annual dinner-dance. The dinner-dance committee has assembled the following expected costs for the event:

Dinner (per person)$11

Favors and program (per person)$2

Band$1,140

Rental of ballroom$570

Professional entertainment during intermission$760

Tickets and advertising$1,330

The committee members would like to charge $32 per person for the evening's activities.

Required:

1. What is the break-even point for the dinner-dance (in terms of the number of persons who must attend)?

2. Assume that last year only 100 persons attended the dinner-dance. If the same number attend this year, what price per ticket must be charged in order to break even?(Round your intermediate calculations and final answer to the nearest whole dollar amount.)

What methods do I use to solve these accounting problems?