Christensen Corporation Christensen Corporation is a wholesaler that sells a single product Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $173.00 per unit. L n Sales Volume 4,010 T 05,010 No Cost of Sales - $307,56714000 $384.267 / su Selling & Administrative Costs $317,993 4010 1) What is the total contribution margin when 4,350 units are sold? & dift , 384,267 5010 $337,173/2010-pe'unit # unita P87.74 high-low unit t = units x eu - high : 384,267 +337, 173= 721,440 low=307, 567 +3 17,993 = 625,560 721,440- 625,560 - 95,880 = 95.88 3010-4010 1000 total mc = a + bx Y = a + bx * 721,440= 693,730 8l66, 730 - 307,567 386, 163 - 317, 163 69,000 145,290 482 463 Names: Dylan Irizaray ddy caoderon n Accounting 285 Team Exercise 1 (Chapters 2-3) Chapter 2 Matching Match each cost term with its proper meaning. H 1) Manufacturing overhead d executive, organizational, and clerical costs costs b) beginning inventory + purchases - ending inventory = K a 2) Selling costs 3) Administrative costs d costs involved in acquiring or making a product E 4) Direct cost d) an increase in costs between two alternatives ) cost easily and conveniently traced to a specified cost object 1 5) Opportunity cost C 6) Sunk costs @ 7) Product costs f) changes in direct proportion to changes in activity (constant per unit) i cost incurred and unchangeable by any future decision or event! 8) Period costs h) taken directly to the income statement when incurred 9) Fixed cost potential benefit given up when one alternative is selected over another D) Costs of goods sold W remains constant through changes in activity within the relevant range 11) Variable cost Al incurred to secure customer orders and deliver goods or services 12) Differential cost manufacturing costs - direct materials - direct labor = Fill in the Blank Specify whether each of the above accounts would appear on the balance sheet or on the income statement the year end. Raw Materials Inventory - BIS Work in Process Inventory - B Finished Goods Inventory - Cost of Goods Sold - IIS Selling Expense - IIS Chapter 3 Multitasking Maniacs Co. Multitasking Maniacs Co. manufactures and sells a specialized cell phone. macs co. manufactures and sells a specialized cell phone. The company's contribution format income statement for the most recent year is given below: % of Sales 100% Sales (20,000 units) Variable Expense Contribution Margin Fixed Expense Net Income Total $1,200,000 $900,000 $300,000 $240,000 $60,000 Per Unit $60 $45 $15 ? Management is anxious to increase the company's profit and has asked for an analysis of a number of items. Required: 1. Compute the company's CM ratio and variable expense ratio. 2. Compute the company's break-even point in both units and sales dollars
