Mastery Problent Cost Volume- Profit Analysis Cost Behavior. Cover to-Cover Company is a manufacturer of shelving for books. The company has compibed the following cost data, and wanes your help in determiring thie cost be havar. After reviewing the data, complete requirements (1) and (2) that follow. 1. Determiene whecher the costs in the table are variable, foced, mixed, or none of these. froduced, potal Costs n (Varable Cost Per Unit X N) + foxed Cost, Complete the following table with your answers. Round variable portion af cost (par unit) anawers to two decinzal places. Biblio fles Company is the chief competitor of Cover-to-Cover Company in the bookstief businest. Biblio files ic unalyaing its manidacturing couts, and has compled the folluming deta for the fret axmonths of then vear, After reviewing the date, answer questions (1) through (J) that follow. (Variable Cst Per dinita Number of Units produced) + Foxed Cost Corrplate the fallowing table 1. From the data previnusly provided, help Biblio files Company essimate the foxed and variable portions of its total costs using the high-low method. Recall that Total Costs (Vartable Cost isr Unit Number of Units Produced) + Fried Cost. Complete the following table 2. Wah you fotal f iand Cost and Variable Cost per Unit from the hiphi low method, compute the totat cost for the following values of N (Number ar Units Prudoced) 3. Why does the total cont compoted for 4,160 units not matech the data for January? a. The high-kw method is accurate inly for months in which production is at fall capacity. b. The high-kow method only gives accurale dota when fixed costs are zero. c. The high-low method gies a formula for the estirated total cost and moy not match levels of production other than the highest ard lewest. d. The highi low method gives accurate datir only for levels of groduction outside the reicuant ranget. Review the contrabobion margin income statements for Cover-to-Coved Compory and Biblio Tilns Compatiy on their respective Income 5 tatienents. Complete the following table from the data provided on the income statements. Each compamy sold 77,800 units during the year. Income Statement - Cover-to-Cover Biblio Files Company is making plans for its next fiscal year, and decides to sell for the new product offerings. Biblio files Company is making plans for its next foscal year, and decides to sell two new types of bookshelves, Basic and Deluxe. The compary has compiled the following entimares for the new prodist offerings: The company is interested in determining how many of each type of bookshelf would have to be sold in order to tireok even, If we think of the Basic and Dehaxe products as components of one overall entarprise product called "Combined, " the unit contribution margin for the Combined product would be 52 . 31 . Fand costs lor the upcaming year are estimated at \$325,710. Recall that the totals of all the sales mox percents must be 100%. Detemmine the amounts to complete the following table Target Drefit Rofer ogain to the incoirie statements for Covet-to-Cower Company and Bidlio Files Company on their respectwe Incomen Statement, Note that both conpanies hase the same aales and net income. Answer guestions (1): (3) that follow, assuming that all data for the coming year is the same as the cumbint year, astept for the ancunt uf sales. 1. If Coverito-Cover Company wants to uncreate its protic by 170,000 in the coming yeac, what mat then ameunt at sales be? Refer again to the incorne statements for Cover-to-Cover Company and Biblio Flles Company on their respective income Statement. Note that beth companies tiave the same sales. and net incame. Answer questions (1) - (3) that follow, assuming thot all data for the coming year is the same as the current year, except for the amount of saies, 1. If Cover-to-Cover Company wants to increase its profit by $20,000 in the coming yeag, what must their amoant of sales ber? 2. If Bithio files Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales be? 3. What would explain the difference between your answers for (1) and (2) ? a. Biblio Files Compary has a higher contribution margin ratio, aod so more of each sales dollar is available to cover ficed conts and provide operating inceme- 6. Cover to Cover Company's contnbution margin rato is lower, meaning that it's mere etficent in its operationa. 6. The compunuas have goals that are tot in the relevant range. d. The answers are not different; eads company hos the same required asles amount for the coining year to achieye the deaired target protit