Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compile the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. Units Produced Total Lumber Cost Total Total Machine Utilities Depreciation Cost Cost 12,000 shelves $144,000 $15,300 $130,000 24,000 shelves 288,000 29,100 130,000 48,000 shelves 576,000 56,700 130,000 60,000 shelves 720,000 70,500 130,000 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these. Lumber Variable Cost X Utilities Mixed Cost Depreciation Fixed Cost 2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If ther for N = Number of Units Produced, Total Costs - (Variable Cost Per Unit x N) + Fixed Cost. Con variable portion of cost (per unit) answers to two decimal places. Fixed Portion Variable Portion Tuna hora 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 " for N = Number of Units Produced, Total Costs = (Variable Cost Per Unit X N) + Fixed Cost. Complete the following table with your answers. variable portion of cost (per unit) answers to two decimal places. Fixed Portion Variable Portion of Cost of Cost (per unit) 12.00 x Cost Lumber Utilities 1,000 X 1.15 X Depreciation 125,000 X 3 LE High-Low Biblio 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 300 6,250 March 1,000 15,000 April 4,800 96,250 1,750 32,500 June 3,015 43,000 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 141,000 13.15 x 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) May Number of Units Produced Total Cost 3,500 187,025 X 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 Produced) Number of Units Produced Total Cost 3.500 187,025 X 4,360 198,334 x 4,800 206,750 X 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 margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Stateme Complete the following table from the data provided on the income statements. Each company sold 84,800 units during the year Cover-to-Cover Company 25 X % Biblio Files Company 40 % 2.00 1.25 x Contribution margin ratio (percent) Unit contribution margin Break-even sales (units) Break-even sales (dollars) 33,920 x 53,000 265,000 169,600 X Feedback > Check My Work Review the definitions of contribution margin ratio and unit contribution margin: Also review the formulas for break-even in terms of units and sales dollars Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 2018 Type here to search a . EI and sales dollars, Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 2048 Sales $424,000 Variable costs: Manufacturing expense Selling expense $254,400 21,200 63,600 Administrative expense (339,200) $84,800 Contribution margin Fixed costs: $5,000 4,000 Manufacturing expense Selling expense Administrative expense 12,200 (21,200) $63,600 O BE Operating income ** Type here to search https://2.cengagenow.com/len/takeAssignmenuldhe. July Contribution margin $84,800 Fixed costs: Manufacturing expense Selling expense Administrative expense $5,000 4,000 12,200 (21,200) $63,600 Operating income Income Statement - Biblio Files > Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 2018 Sales $424,000 Variable costs: Manufacturing expense $169,600 Selling expense 16,960 Administrative expense 67,840 (254,400) Contribution margin $169,600 Fixed costs: Manufacturing expense $88,000 Selling expense 8,000 @ https:/N2.cengagenow.com/ilm/take Assignment/takeAssigned Manufacturing expense $80,000 Selling expense 8,000 Administrative expense 10,000 (106,000) Operating income $63,600 Sales Mix Biblio Files Company is making plans for its next fiscal year, and decides 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 $5.00 $1.75 Basic Deluxe 9.00 8.10 The company is interested in determining how many of each type of bookshelf would have to be sold in order to be en 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 year are estimated at $323,400. Recall that the totals of all the sales mix parcents must be 100%. Determine the amounts to complete the following table Type of Percent of Break-Even Break-Even Sales Bookshelf Sales Mix Sales in Units in Dollars 60 Basic 117,626, X 588,133 X % 40 Dell 202161 32.573.4 x + B 11/ Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compile the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow. Units Produced Total Lumber Cost Total Total Machine Utilities Depreciation Cost Cost 12,000 shelves $144,000 $15,300 $130,000 24,000 shelves 288,000 29,100 130,000 48,000 shelves 576,000 56,700 130,000 60,000 shelves 720,000 70,500 130,000 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these. Lumber Variable Cost X Utilities Mixed Cost Depreciation Fixed Cost 2. For each cost, determine the fixed portion of the cost, and the per-unit variable cost. If ther for N = Number of Units Produced, Total Costs - (Variable Cost Per Unit x N) + Fixed Cost. Con variable portion of cost (per unit) answers to two decimal places. Fixed Portion Variable Portion Tuna hora 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 " for N = Number of Units Produced, Total Costs = (Variable Cost Per Unit X N) + Fixed Cost. Complete the following table with your answers. variable portion of cost (per unit) answers to two decimal places. Fixed Portion Variable Portion of Cost of Cost (per unit) 12.00 x Cost Lumber Utilities 1,000 X 1.15 X Depreciation 125,000 X 3 LE High-Low Biblio 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 300 6,250 March 1,000 15,000 April 4,800 96,250 1,750 32,500 June 3,015 43,000 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 141,000 13.15 x 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) May Number of Units Produced Total Cost 3,500 187,025 X 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 Produced) Number of Units Produced Total Cost 3.500 187,025 X 4,360 198,334 x 4,800 206,750 X 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 margin income statements for Cover-to-Cover Company and Biblio Files Company on their respective Income Stateme Complete the following table from the data provided on the income statements. Each company sold 84,800 units during the year Cover-to-Cover Company 25 X % Biblio Files Company 40 % 2.00 1.25 x Contribution margin ratio (percent) Unit contribution margin Break-even sales (units) Break-even sales (dollars) 33,920 x 53,000 265,000 169,600 X Feedback > Check My Work Review the definitions of contribution margin ratio and unit contribution margin: Also review the formulas for break-even in terms of units and sales dollars Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 2018 Type here to search a . EI and sales dollars, Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 2048 Sales $424,000 Variable costs: Manufacturing expense Selling expense $254,400 21,200 63,600 Administrative expense (339,200) $84,800 Contribution margin Fixed costs: $5,000 4,000 Manufacturing expense Selling expense Administrative expense 12,200 (21,200) $63,600 O BE Operating income ** Type here to search https://2.cengagenow.com/len/takeAssignmenuldhe. July Contribution margin $84,800 Fixed costs: Manufacturing expense Selling expense Administrative expense $5,000 4,000 12,200 (21,200) $63,600 Operating income Income Statement - Biblio Files > Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 2018 Sales $424,000 Variable costs: Manufacturing expense $169,600 Selling expense 16,960 Administrative expense 67,840 (254,400) Contribution margin $169,600 Fixed costs: Manufacturing expense $88,000 Selling expense 8,000 @ https:/N2.cengagenow.com/ilm/take Assignment/takeAssigned Manufacturing expense $80,000 Selling expense 8,000 Administrative expense 10,000 (106,000) Operating income $63,600 Sales Mix Biblio Files Company is making plans for its next fiscal year, and decides 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 $5.00 $1.75 Basic Deluxe 9.00 8.10 The company is interested in determining how many of each type of bookshelf would have to be sold in order to be en 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 year are estimated at $323,400. Recall that the totals of all the sales mix parcents must be 100%. Determine the amounts to complete the following table Type of Percent of Break-Even Break-Even Sales Bookshelf Sales Mix Sales in Units in Dollars 60 Basic 117,626, X 588,133 X % 40 Dell 202161 32.573.4 x + B 11/
