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1. Boneyard Bottles manufacture double-walled bottles and tumblers from surgical-gradestainless steel and titanium. The equipment used to manufacture the bottles and tumblersproduces high volumes and requires expensive maintenance. The following repair andmaintenance information from last year has been gathered to analyze the behaviour of therepair and maintenance costs because they change each month but not directly with salesvolumechanges.

Month	MachineHours	Repair&MaintenanceCost
January	2900	$77,543
February	2875	$77,190
March	2750	$76,570
April	3120	$79,468
May	3226	$82,540
June	2961	$81,310
July	2899	$78,934
August	3299	$89,420
September	3144	$89,781
October	2778	$77,325
November	3023	$82,410
December	3098	$79,612

Required:

1. UsetheHigh-LowMethodtoanalyzetherepairs&maintenancecostsintotheirvariableandfixed portions.
   1. Expressthetotalrepairs&maintenancecostusingthetotalcostformula.

1. UsetheLeast-SquaresRegressionMethodtoanalyzetherepairs&maintenancecostsinto theirvariableand fixed portions.
   1. Expressthetotalrepairs&maintenancecostusingthetotalcostformula.

Assignment3|ManagementAccounting(SummerQuarter2022)

****ThisrequirestheAnalysisToolPaktobeaddedintoMicrosoftExcel****

****Searchfor"regression"inExceltofindinstallationdirections****

1. Boneyard Bottles manufacture double-walled bottles and tumbers from surgical-gradestainless steel and titanium. Boneyard Bottles has started using the cost-volume-profitthem information for planning future operating activity. The following information hasbeen gathered to assist in the preparation of a contribution margin income statement, atraditional cost-volume-profit graph, a CVP staircase diagram, and to calculate breakevenpoints,targeted profit, marginofsafety, anddegreeofoperating leverage.

Sellingpriceperbottle/tumbler	$55	Expectedaverageunitsalespermonth	18,000units
Perbottle/tumbler:
Directmaterials	$8.50
Directlabor	$3.00
Manufacturingoverhead	$5.00
Fixedcosts permonth:
Fixedmanufacturingoverhead	$425,000
Targetedprofit permonthgoal:	$425,000
Estimatedpercentagechangeinnet operatingincome	12.50%

Required:

1. Prepareacontributionmarginincomestatementforasinglemonth.
   1. Prepareacontributionmarginincomestatementforayear.
   2. Calculatethebreakevenpointsinbothsalesdollarsandunitvolumeonamonthlybasis.
   3. Calculatethetargetedprofitgoalsforbothsalesdollarsandunitvolumetogenerate

$425,000ofmonthlynetoperatingincome.

1. Calculatethemarginofsafetyforthetargetedprofit shownabove.
2. Calculatethedegreeofoperatingleverageattheexpectedaveragesalesof18,000units.
3. Use the degree of operating leverage in requirement (e) to estimate the change in netoperatingincomeifrevenueincreases 12.5%.