Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has complled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. Total Total Total Machine Units Lumber Utilities Depreciation Produced Cost Cost Cost 6,000 shelves $66,000 $8,400 $130,000 12,000 shelves 132,000 15,300 130,000 24,000 shelves 264,000 29,100 130,000 30,000 shelves 330,000 36,000 130,000 1. Determine whether the costs in the table are variable, foxed, mixed, or none of these Lumber Variable Cost Utilities Mixed Cost Depreciation 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 "O". Recall that, for N- Number of Units Produced, Total Costs (Variable Cost Per Unit XN) + Fixed Cost. Complete the following table with your answers. Round variable portion of cost (per unit) answers to two decimal places. Fixed Portion Variable Portion 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 - (Variable 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 Variable Portion Cost of Cost of Cost (per unit) Lumber Utilities Depreciation High-Low Biblio Files Company is the chief competitor of Cover-to-Cover Company in the bookshelf business. Bibllo Files is analyzing its manufacturing costs, and has compiled foliowing 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 275 6,250 March 1,000 15,000 April 6,775 136,250 May 1,750 32,500 3,015 48,000 June 1. From the data previously provided, help Biblio 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) + Fixed Cost. Complete the following table. Total Fixed Cost 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 Total Cost 3,500 4,360 6,775 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. b. The high-low method only gives accurate data when fixed costs are zero, C. 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, Contribution Margin Review the contribution mari income statements for Coverto-Cover Company and Biblin Files Company on their respective Income Statements Complete the following Contribution Margin Review the contribution margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statements Complete the following table from the data provided on the income statements. Each company sold 78,800 units during the year Cover-to-Cover Company 96 Biblio Files Company 90 Contribution margin ratio (percent) Unit contribution margin Break-even sales (units) Break-even sales (dollars) Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 2018 Sales $394,000 Variable costs: Manufacturing expense $236,400 Selling expense 19,700 Administrative expense 59,100 (315,200) Contribution margin $78,800 Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8 $394,000 Sales $236,400 Variable costs Manufacturing expense Selling expense Administrative expense Contribution margin Fixed costs: 19,700 59,100 (315,200) $78,800 Manufacturing expense $5,000 Selling expense 4,000 Administrative expense 10,700 (19,700) Operating income $59,100 Income Statement. Bibllo Files Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8 Sales $394,000 Sales $394,000 Variable costs: Manufacturing expense Selling expense Administrative expense $157,600 15,760 63,040 (236,400) $157,600 $80,500 Contribution margin Fixed costs: Manufacturing expense Selling expense Administrative expense Operating income 8,000 10,000 (98,500) $59,100 Sales Mix Biblio Fles Company is making plans for its next fiscal year, and decides to sell two new types of bookshelves, Basit and Deluxe. The company has compiled the following estimates for the new product offerings. Type of Bookshell Basic Sales Price per Unit Variable Cost per Unit $1.75 8.10 $5.00 Deluxe 9.00 The company is interested in determining how many of each type of bookshelf would have to be sold in order to break even. If we think of the Basic and Deluxe products as components of one overall enterprise product called "Combined," the unit contribution margin for the combined product would be $2.31. Fixed costs for the upcoming the company is interested in determining how many of each type of bookshell would have to be sold in order to break even we think of the G and Deluxe products as components of one overall enterprise product called "Combined," the unit contribution margin for the Combined product would be $2.31. Fixed costs for the upcoming year are estimated at $334,950. Recall that the totals of all the sales mix percents must be 100%. Determine the amounts to complete the following table: Type of Percent of Break-Even Sales Break-Even Sales Bookshell Sales Mix in Units in Dollars Basic Deluxe % Target Profit Refer again to the income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statement. Note that both companies have the same sales and 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 1. If Cover-to-Cover Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales be? 2. 1 Biblio Files Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales be? 3. What would explain the difference between your answers for (1) and (2)? a. Biblo Files Company has a higher contribution margin ratio, and so more of each sales deltar is available to cover fixed costs and provide operating Incorne. b. Cover-to-Cover Company's contribution margin ratio is lower, meaning that it's more efficient in its operations. c. The companies have goals that are not in the relevant range