Cost Behavior Cover-to-Cover Company is a manufacturer of sheliving for books. The company has compiled the folowing cost data, and wants your help in determining the cost behar After reviewing the data, complete requirements (1) and (2) that follow. Units Produced Lumber Cost 12,000 shelves $144,000 24,000 shelves288,000 48,000 shelves 60,000 shelves 720,000 Total Total Total Machine Utilities Cost Depreciation Cost $14,800 28,600 56,200 $140,000 140,000 40,000 576,000 70,000 140,000 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these Variable Cost Fixed Cost Mixed Cost None of thes Lumbor Utilities Depreciation and the per-unit variable cost. If there is no amount or an amount is zero, enter "O". Recall that, tor N. Number of Units Produced. Total Costs . (Variable Cost Per Unit x N) + Fixed Cost Complete the following table with your answers. Determine whether the costs in the table are variable, fixed, mixed, or none of these. Variable Cost Fixed Cost Mixed Cost None of these Lumber Utilities Depreciation 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 Ne Number of Units Produced, Total Costs (Variable Cost Per Unit x N)Fixed Cost. Complete the following table with your answers Fixed Portion of Cost Variable Portion of Cost (per Unit) Cost Lumber Utilities Depreciation High-Low Bblio Files Company is the chief competitor of Cover-to-Cover Company in the bookshelf business. Biblio Files is analyzing its manufacturing costs, and has compilied the following data fo the first six months of the year. After reviewing the data, answer questions (1) through (3) that follow January February March Apri May June Number of Units Produced Total Cost $65,600 6,250 15,000 77,500 32,500 4,360 250 1,000 5,000 1,750 3,015 48,000 1. From the data previously provided, heip Biblio Files fixed and variabie Per Unit x Number of Units Produced) Fixed Cost. Complete the tollowing table. Company estimate the flaxed and varisble portions of its total costs using the high-low method Recall that Total Costs (Variable Cost Total Fixed Cost Variable Cost per Unit 2 with your Total Fixed Cost and Variable Cost per Unit from the high-dow method, compute the total cost for the tolowing values or N (Number of Units Produced High-Low 1. From the data previously provided, hep Bbio Files Company estimate the foxed and vaniable portions of its total costs using the high-low metmod Recal that Total Costs (Wariable Cost Per Unit x Number of Units Produced) +Fixed Cost. Complete the foWowing table. Total Fixed Cost Variable Cost per Unit 2 With your Total Fixed Cost and Variable Cost per Unlt from the high-low method,compute the total cost for the foloawing values of N (Number of Units Produced Number of Units Produced 3,500 4,360 5,000 Total Cost 3. Why does the total cost computed for 4,360 units not match the data for January in the table at the top of this gives a formula for the estimated total cost and may not match levels of production other than the highest and lowest The high-low method The high-low method gives accurate data only for levels of production outside the relevant range The high-low method only gives accurate data when fxed costs are zero. The high-low method is accurate only for months in which production is at full capacity High-Low Contribution Margin Review the contribution margin income statements for Cover-to-Cover Company and Bublio Files Company on their respective Income Statements panels. Compiete the following table the data provided in the income statements. Each company sold 84,800 units during the year Cover-to-Cover Company Biblio Files Company Unit contribution margin S Break-even sales (units) Break-even sales (dollars) s Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 20Y7 1 Sales 424,000.00 Variable costs: Manufacturing expense Selling expense Administrative expense 233,200.00 21,20000 63,600.00 318,000.00 6Contribution margin 7 Fixed costs $106,000.00 Manufacturing expense 9 Selling expense 101 Administrative expense 11 Income from operations 5,000.00 4,000.00 33,400.00 42,400.00 563,600.00 e Statement- Biblio Files Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 20Y7 1 Sales 2Variable costs 8 Manufacturing expense 424,000.00 Selling expense 5 Administrative expense 6Contribution margin 169,600.00 6,960.00 67,840.00 254,400.00 169,600.00 Fixed costs: Manufacturing expense Selling expense Administrative expense 88,000.00 8,000.00 0,000.00 106,000.00 1 Income from operations 63,600.00 Sales Mix Biblio Files Company is making plans for its next fiscal year, and decides to sell wo new types o new product offerings bookshelves, Basic and Deluxe. The company has compiled the following estimates for the Type of Bookshelf Basic Deluxe Sales Price per Unit $5.00 9.00 Variable Cost per Unit $1.75 8.10 The company is interested in determining how many of each type of booksheltf would have to be sold in order to break one overal enterprise product cafed Combined the unt contribution margin for the Combined procduat would be $2.31, Fixed costs for te upconing year ave estimanted at 5340.2 Recat that the totals of all the sales mix percents must be 100% Determine the amounts to complete klowing table even we think of the Basic and Delisxe products as components Type of Bookshelf Percent of Sales Mx Break-Even Sales in Units Break-Evan Sales in Dollans Basic Deluxe les Mix rget Profit efer again to the income statements for Cover-to-Cover Company and Biblio Fles Company on their respective Income Statement panels. Note that both companies have the same sa d net income. Answer questions (1)-(3) that follow, assuming that all data for the coming year is the same as the current year, except for the amount of sales If Cover-to-cover Company wants to increase its profit by S30,000 in the coming year, what must their amount of sales be? t Biblio Files Company wants to increase its profit by $30,000 in the coming year, what must their amount of sales be?s 3. What would explain the difference between your answers for (1) and (2)? Cover-to-Cover Company's contribution margin ratio is lower, meaning that it's more efficient in its operaticns. The companies have goals that are not in the relevant range. The answers are not different, each company has the same required sales amount for the coming year to achieve the desired target proft Bblio Files Company has a higher contribution margin ratio, and so more of each sales dolar is available to cover fxed costs and provide income from operations