Cover-to-Cover Company is a manufacturer of shelving for books. The company has compiled the following cost data, and wants your help in determining the cost behavior. After reviewing the data, complete requirements (1) and (2) that follow

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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.

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.

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 82,800 units during the year.

Income Statement - Cover-to-Cover

Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8
Sales		$414,000
Variable costs:
Manufacturing expense	$248,400
Selling expense	20,700
Administrative expense	62,100	(331,200)
Contribution margin		$82,800
Fixed costs:
Manufacturing expense	$5,000
Selling expense	4,000
Administrative expense	11,700	(20,700)
Operating income		$62,100

Income Statement - Biblio Files

Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 20Y8
Sales		$414,000
Variable costs:
Manufacturing expense	$165,600
Selling expense	16,560
Administrative expense	66,240	(248,400)
Contribution margin		$165,600
Fixed costs:
Manufacturing expense	$85,500
Selling expense	8,000
Administrative expense	10,000	(103,500)
Operating income		$62,100

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 Bookshelf	Sales Price per Unit	Variable Cost 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 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 $346,500. Recall that the totals of all the sales mix percents must be 100%. Determine the amounts to complete the following table.

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 $30,000 in the coming year, what must their amount of sales be? $

2. If Biblio Files Company wants to increase its profit by $30,000 in the coming year, what must their amount of sales be? $

Total Total Total Machine Units Lumber Utilities Depreciation Produced Cost Cost Cost $135,000 135,000 13,000 shelves $143,000 26,000 shelves 286,000 52,000 shelves 572,000 65,000 shelves 715,000 $16,950 31,900 61,800 76,750 135,000 135,000 Fixed Portion of Cost Variable Portion of Cost (per Unit) Cost Lumber Utilities Depreciation Units Produced Total Cost January 4,360 units $65,600 February 275 6,250 March 15,000 1,000 5,775 April 88,750 May 1,750 32,500 June 3,015 48,000 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 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 5,775 Biblio Files Cover-to-Cover Company Company Contribution margin ratio (percent) Unit contribution margin Break-even sales (units) Break-even sales (dollars)