Cost Behavior Cover-to-Cover Company is a manufacturer of shelving for books. The company has compled the following 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 Coat Coet 14,000 shelves $168,000 $17,100 $130,000 28.000 shelves 336,000 33.200 130,000 56,000 shelves 672,000 65.400 130.000 70,000 shelves 540,000 81,500 130,000 1. Determine whether the costs in the table are variabile, fed, med, or one of these Depreciation 2. For each cost determine the portion of the cost and then table cost. If there is no manis, och for Nortodonta (Vatable Cost per unit) Cost Complete the following table with your swers, Round variable portion of cost (t) answers to two decimal places Fred Pertion Variable Portion of Cont of Cont (per unit) Lumber URTE Fixed Portion of Cost Variable Portion of Coat (per unit) Cost Lumber Ulities Depreciation Il High-Low Babilo Files Company is the chief competitor of cover-to-Cover Company in the bookshell business. Bolo les saling ts mahutaturing costs, and has come the following data for the first month of year. After reviewing the data, answer questions (1) through (?) that follow Units Produced Total Cost January 565,600 February 200 6.250 Marth 1.000 15,000 April HY 1,750 32.500 June 3,01 1.000 1. From the date provided here company the ed and water portion of stoc the highew method Recht Total Code Units Produced out. Come the following the Totaldo Variable Cont per Unit Wood Centrom the high-low the compute the total or the following waves of New) 2. with your Total Feed Coot and Vantable Cost per Unit from the high-low method, compute the total cost for the following values Number of Units produced) Number of Units Produced 3,500 Total Cost 7,800 3. Why does the total cost computed for 4,360 units not match the data for January a. The high-tow method of 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 e. The high tow method gives a formula for the estimated total cost and may not match levels of production other than the highest and lowest d. The highrow 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 to let Company on their respective come statements Complete the following te from the provided on the statements ach company od 16,100 unite during the year Cover-to-Cover Company Company Contribution margb(N) Biblio Files statements. Each company sold 76,800 units during the year. Biblio Files Cover-to-Cover Company Company Contribution margin ratio (percent) % % Unit contribution margin Break-even sales (units) DI Break-even sales (dollars) TA Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 2048 $384,000 > Sales Variable costs: Manufacturing expense Selling expense Administrative expense Contribution margin $230,400 19,200 57,600 (307,200) $76,800 Fixed costs: $5,000 Manufacturing expense Selling expense 4,000 Administrative expense 10.200 (19.200) Administrative expense 10,200 (19,200) Operating income $57,600 Income Statement - Biblia Flies Bibllo Files Company Contribution Margin Income Statement For the Year Ended December 31, 2018 Sales $384,000 Variable costs Manufacturing expense $153,000 Selling expense 15,360 Administrative pense 61,440 (230,400) Contribution margin $153.600 Fixed costs Manufacturing expert 578,000 Selling expense 1.000 Administrative expense 10,000 96,000) Operating income 157.500 Sales M bles Company is mong plans for next cal year, and decides to see types of bookshelves, lasand Dee The company has come the finger for the coffen Type of Sales Price Variable cost Bookshell per Unit Per Unit Sales MIX Biblio Fles Company is making plans for its next fiscal year, and decides to sell two new types of bookshelves, Basic and Deluwe. The company has compled the following estimates for the new product offerings Type of Sales Price Variable Cost Bookshelf per Unit per Unit Basic $5.00 $1.75 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 break even if we think of the Base and product is components of one overall enterprise product called "Combined the unit contribution margin for the combined product would be 52.31. Fixed costs for the upcoming your arestimated at $330,330. Recall that the total of all the same percera must be 100%. Determine the amounts to complete the following table Type of Percent of Break-Even Sales Break-Even Sales Bookshelf Sales MIN in Us In Dollars Delu Target Pro Refer again to the income statements for evento-Cover Comen and his company on their respectatement that both companies are the meantime (1) that forming that a data for the coming year is the same as the cent year, except for the amount of 1. Cover Cover Company was to proty S411,000 the coming year, what the amount of 2.1 es company wants to increase its profit by $40,000 in the coming year, who must that of the Target Profit Refer again to the income tatements for Cover-to-Cover Company and Biblio Files Company on their respective Income Statement. Note that both companies have the same sal (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. of Cover-to-Cover Company wants to increase its profit by $40,000 in the coming year, what must their amount of sales be? 2. If Biblio Files company wants to increase its profit by $40,000 in the coming year, what must their amount of sales be? 3. What would explain the difference between your answers for (1) and (297 m. Bibiio Mes company has a higher contribution margin ratio, and so more of each sales dollar la avaliable to cover fived couts and provide operating wicare b. Cover-to-Cover Company's contribution margin ratio is tower, meaning that it's more cient in its operations, c. The companies have goals that are not in the relevant range. d. The answers are not different; each company has the same required sales amount for the coming year to achieve the desired target pront