Chapter 20 Mastery (Mastery) Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavin After reviewing the data complete requirements (1) and (2) that follow. Units Produced Total Lumber Cost Total Total Machine Utilities Depreciation Cost Cost 10,000 shelves $120,000 $12,500 $145,000 20,000 shelves 240,000 24,000 145,000 40,000 shelves 480,000 50,000 shelves 600,000 47,000 58,500 145,000 145,000 1. Determine whether the costs in the table are variable, fived, mixed, or none of these Lumber Variable Cost Utilities Depreciation Mixed Cost - Fixed Cost 2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If there is no amount or an amount is zero, enter "0". Recall that, for N-Number of Units Produced, Total Costs (Varable Cost Per Unit x N)+ Fixed Cost Complete the following table with your answers. Round variable portion of cost (per unit) answers to two decimal places. Fixed Portion of Cost Variable Portion of Cost (per Unit) Cost Lumber 12 Utities 1,000 1.15 Depreciation 145,000 Chapter 20 Mastery (Mastery) High-Low biblia Files Company is the chief competitor of Cover-to-Cover Company in the bookshelf business. Biblio Files is analyzing its manufacturing costs, and has compiled the following data for the first six months of the year. After reviewing the data, answer questions (1) through (3) that follow Units Produced Total Cost January 4,360 units $65,600 February March 300 6,250 1,000 15,000 Apri 7,800 110,750 1,750 May June 3,015 32,500 48,000 1. From the data previously provided, help Bible Files Company estimate the fixed and variable portions of its total costs using the high-low method. Recall that Total Costs (Variable Cost Per Unit x Number of Units Produced) Feed Cost. Complete the following table Total Fixed Cost 3,750 v Variable Cost per Unit 2. With your Total Fixed Cost and Variable Cost per Unit from the high-low method, compute the total cost for the following values of N (Number of Units Produced). Number of Units Produced 3,500 4.360 7,800 Total Cost 54,250 67,150 118,750 3. Why does the total cost computed for 4,360 units not match the data for January? a The high-low method is accurate only for months in which production is a full capacity Chapter 20 Mastery (Mastery) The high-low method gives a formula for the estimated total cost and may not match levels of production other than the highest and lowest d. The high-low method gives accurate data only for levels of production outside the relevant range Review the high-low method, and use the smallest and largest levels of production in your computation Contribution Margin Arview the contribution margin income statements for Cover-to-Cover Company and Balio Files Company on their respective Income Statements. Complete the following table from the data provided on the income statements. Each company sold 81,800 units during the year Contribution margin ratio (percent) Unit contribution margin Cover-to-Cover Company 2018 Biblio Files Company 40 Break-even sales (units) Break-even sales (dollars) 20,450 51,125 102,250 255,625 Review the definitions of contribution margin ratio and unit contribution margin. Also review the formules for break-even in terms of units sold and sales dollars Chapter 20 Mastery (Mastery) Income Statement - Cover-to-Cover Sales Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8 $409,000 Variable costs: Manufacturing expense $245,400 Selling expense 20,450 Administrative expense 61,350 (327,200) Contribution margin $81,800 Fixed costs: Manufacturing expense $5,000 > Selling expense 4,000 Administrative expense 11,450 (20,450) Operating Income $61,350 Income Statement - Biblio Files Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8 Sales $409,000 Variable costs: Manufacturing expense $163,600 Selling expense 16,360 Administrative expense 65,440 (245,400) Check My Work 5 more Check My Work uses remaining. Assignment Score: 93.75% I Chapter 20 Mastery (Mastery) Administrative expense Operating income 11,450 (20,450) $61,350 Income Statement Biblie Files Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 2018 $409,000 Variable c Hanufacturing expense $163,000 Selling expense 16.360 Administrative expense 65,440 (245,400) Contribution margin $163,600 Fixed cust Hanufacturing expense $84.250 Selling expense Administrative expense 1,000 10,000 Operating income (102,250) $61,350 I Sales Mix Flies Company is making plans for its next fiscal year, and deodes to sell two new types of bookshelves, Basic and Deluxe. The company has compiled the following estimates for the new product offerings Type of Sales Price Variable Cost Bookshelf per Unit per Unit B Deluxe $5.00 9.00 $1.75 8.10 The company is interested in determining how many of each type of bookshe would heve to be sold in order to break even If we think of the Basic and Dee pducts components of one everal enterprise Check My Work Check My Wor Email instructor Save and tas Submit Assignment for Grading Chapter 20 Mastery (Mastery) product caled "Combined, the unit contribution margin for the Combined product would be $2.31. Fixed costs for the upcoming year are estimated at $341,880. Recall that the totals of all the sam persents t be 100% Determine the amounts to complete the following table Type of Bookshelf Percent of Sales Mis Break-Even Sales in Units Break Even Sales In Dollars 88,000 444,000 40 V Des 59,200 296,000 x Review the definition of treas even p Recall that the Combined unt contribution margin is given by [(Bavic unit contribution margin) x (Basic percent of sales mix)) ((Deluxe unit contribution margin) x (Deluxe percent of sales mix)). Since these percents must add up to 100%, we have the following (Basic percent of sales mix) (Deluxe percent of sales mix) 100%, (Deluxe percent of sales mix) 100% (Basic percent of sales mx) Target Pref Refer again to the income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statement, hote that both companies have the same sales and out income Answer questions (0-0) that flow, assuming that all data for the coming year is the same as the current year except for the amount of sales. 1. If Cever-to-Cover Company wants to crease its profit by $20,000 in the coming year, what must their amount of sales b 500,000 3. Company wants to increase its profit by $20,000 in the coming year what must their amount of sales 45,900