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E5.5 Determine fixed and variable costs using the high-low method and prepare graph. (LO 1.2), AP The controller of Hall Industries has collected the following

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E5.5 Determine fixed and variable costs using the high-low method and prepare graph. (LO 1.2), AP The controller of Hall Industries has collected the following monthly expense data for use in analyzing the cost behavior of maintenance costs Month Total Maintenance Costs Total Machine Hours January 52,640 3,500 February 3,000 4,000 March 3,600 6,000 April 4,500 7.900 May 3.200 5,000 June 4,620 8.000 Instructions (a) Determine the fixed- and variable-cost components using the high-low method. (b) Prepare a graph showing the behavior of maintenance costs and identify the fixed- and variable- cost elements. Use 2,000-hour increments and $1,000 cost increments. PS-4A Computer break-even point and margin of safety ratio, and prepare a CVP income statement before and after changes in business environment (LO.3. 4.3. E Mary Willis is the advertising manager for Bargain Shoe Store. She is currently working on a major promotional campaign. Her ideas include the installation of a new lighting system and increased display space that will add $24,000 in fixed costs to the $270,000 currently spent. In addition, Mary is proposing that a 5% price decrease ($40 to $38) will produce a 20% increase in sales volume (20,000 to 24,000). Variable costs will remain at 524 per pair of shoes Management is impressed with Mary's ideas but concerned about the effects that these changes will have on the break-even point and the margin of safety. Instructions Compute the current break-even point in units, and compare it to the break-even point in units if Mary's ideas are used Compute the margin of safety ratio for current operations and after Mary's changes are introduced. (Round to nearest full percent) (6) Current margin of safety ratio 16% (c) Prepare a CVP income statement for current operations and after Mary's changes are introduced. (Show column for total amounts only.) Would you make the changes suggested

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