Exercise 11-9 Mixed cost at different levels of activity LO 11-1 Benson Corporation paid one of its sales representatives $5,000 during the month of March. The rep is paid a base salary plus $11 per unit of product sold. During March, the rep sold 120 units. Required Calculate the total monthly cost of the sales representative's salary for each of the following months Answer is complete but not entirely correct. Month Number of units sold Total variable cost $ April 160 1.760 5,000 6,760 S May 70 770S 5,000 5.770 June 170 1.870 5,000 6,870 July 80 880 5,000 5,880 S Total red cost Total salary cost $ $ $ $ Exercise 2-12 Cost Behavior; High-Low Method (LO2-3, LO2-4) Speedy Parcel Service operates a fleet of delivery trucks in a large metropolitan area. A careful study by the company's cost analyst has determined that if a truck is driven 120,000 miles during a year, the average operating cost is 11.6 cents per mile. If a truck is driven only 80,000 miles during a year, the average operating cost increases to 13.6 cents per mile. Required: 1.& 2. Using the high-low method, estimate the variable and fixed cost elements of the annual cost of truck operation (Round the "Variable cost per mile" to 3 decimal places.) Miles Driven Total Annual Cost High level of activity Low level of activity Change per unit Variable cost per mile Fixed cost per year Miles Driven Total Annual Cost High level of activity Low level of activity Change per unit Variable cost per mile Fixed cost per year 3. If a truck were driven 100,000 miles during a year, what total cost would you expect to be incurred? Total annual cost Problem 11-28 Determining the break-even point and preparing a contribution margin Income statement LO 11-5 Ritchie Manufacturing Company makes a product that it sells for $200 per unit. The company incurs variable manufacturing costs of $101 per unit. Variable selling expenses are $19 per unit, annual fixed manufacturing costs are $464,000, and fixed selling and administrative costs are $256,000 per year. Required Determine the break-even point in units and dollars using each of the following approaches: a. Use the equation method. b. Use the contribution margin per unit approach. c. Prepare a contribution margin income statement for the break even sales volume. Complete this question by entering your answers in the tabs below. Req A to B Reqc Determine the break-even point in units and dollars using the equation method, the contribution margin per unit approach and the contribution margin ratio approach. Complete this question by entering your answers in the tabs Req A to B Reqc contribu per unit approach Determine the break-even point in units and dollars using the equation method, and the contribution margin ratio approach. a Break-even point in units Break-even point in dollars b. Contnbution margin per unit Break-even point in units Break-even point in dollars Req c > Complete this question by entering your answers below. Req A to B ReqC Prepare a contribution margin income statement for the break-even sales volume RITCHIE MANUFACTURING COMPANY Contribution Margin Income Statement Reg A to B Complete this question by entering your answers in the tabs below. Req A to B Reqc Prepare a contribution margin income statement for the break-even sales volume. RITCHIE MANUFACTURING COMPANY Contribution Margin Income Statement Cost of goods sold Fixed costs Sales Selling expenses Variable costs
