Information regarding a product manufactured and sold by Schiffran is shown below. Maximum capacity with existing facilities Total fixed costs per month Variable cost per unit. Sales price per unit 4,000 units $50,000 $42.00 $56.00 1. Refer to the above data. The contribution margin ratio for this product is: a 20% c 30% b 25% d 40% Refer to the above data. The number of units Schiffiman must sell to break even is: (rounded) a 3,927. c 4,823 b 3572 d 5,140 2. 3. Refer to the above data. The dollar sales volume necessary to produce monthly operating income of $12,000 before taxes is: a $188,000 c $288,000 b $186,000. d $248,000 Use the following data for questions 4 and 5. The monthly high and low levels of units and total manufacturing overhead for Ratnere Company are shown below: Manufacturing Overhead Units Highest observed level .. Lowest observed level 117,000 81,000 $306,000 234,000 Refer to the above data. The cost formula for Ratnere's monthly overhead cost can be expressed as: a $2.00 average cost per unit. b $1.75 average cost per unit. c $24,000 fixed cost plus $2.00 per unit d $72,000 fixed cost + $2.00 per unit. 5. Refer to the above data. In a month in which 30,000 equivalent full units are produced Rathere's mamfacturing overhead should be approximately a $52,500. c $ 132,000. b $79,500. d $ 90,500 2 Management predicts total sales for June to be $3,000,000, yielding a margin of safety of $1,000,000 and a contribution margin ratio of 25%. Which of the following amounts is not consistent with this information? Fixed costs, $500,000. f Variable costs, $750,000. Operating income, $250,000 Break-even sales volume, $2,000,000. e Use the following data for questions 2 through 4. The recent high and low levels of hows operated and monthly repair cost for heavy equipment for Universal Mfg. are shown below: Hours Operated Repair Cost Highest observed level 24,000 $7,450 Lowest observed level 21,500 6,700 Refer to the above data. Using the high-low method, compute the variable element of repair cost per hour of operation for Universal's equipment: a $750c $0.30. b $3.33. d $0.34. C 8. Refer to the above data. Using the high-low method, compute the fixed element of Universal's monthly repair cost: a $150. c $6,300. b $250. d $6,450. 9. Refer to the above data. The total estimated repair cost for a month in which Universal operates equipment for 19,000 hours is: a $5.950. c $6,450. b $6,300. d $5,700. 10. 40% Perkins Corporation manufactures two products; data are shown below. Contribution Relative Margin Ratio Sales Mix Product A 40% Product B. 30% 60% If Perkins' monthly fixed costs average $425,000, what is its break-even point expressed in sales dollars? a $1,320,000. $1,250,000. b $1,400,000 d $990,000 c Paulsen Company sells only one product. The regular selling price is $50. Variable costs are 70% of this selling price, and fixed costs are $7,500 per month Management decides to increase the selling price from $50 to $55 per unit. Assume that the cost of the product and the fixed operating expenses are not changed by this pricing decision 11. Refer to the above date. At the original selling price of $50 per unit, what is the contribution margin ratio? 12. Refer to the above data At the original selling price of $50 per unit, how many mits must Poulsen sell to break even? 13. Refer to the above data. At the original selling price of $50 per unit, what dollar volume of sales per month is required for Paulsen to eam a monthly operating income of $5,000? 14. Refer to the above data. At the increased selling price of $55 per unit, what is the contribution margin ratio? 15. Refer to the above data. At the increased selling price of $55 per unit, what dollar volume of sales per month is required to break-even? Rhinefold brews reduced calorie beer and regular beer. Sales of its reduced calorie beer represent 25% of the company's total revenue. Sales of regular beer represent the remaining 75% Reduced calorie beer has a contribution margin ratio of 80%, whereas the contribution margin ratio of regular beer is only 60%. Rhinefold's monthly fixed costs average $609,500. 16. What is the company's monthly break-even point expressed in sales dollars? $_ 17. What monthly sales level must be achieved for Rhinefold to eam a monthly operating income of $350,000 $ 18. If Rhinefold generates $1,400,000 in monthly sales, it will earn a monthly operating income of $ 19. Assume Rhinefold's margin of safety was $300,000 in May. What was the company's operating income in May? S 20. If Rhinefold's monthly fixed costs increase by $8.500, what level of monthly sales revenue will be requured to break-even? $
