MP, Chapter 20 Calculator Printem Mastery Problem: Cost-Volume Profit Analysis Cost Behavior 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 cont behavior. After reviewing the data, complete requirements (1) and (2) that follow. Total Total Total Machine Units Lumber Utilities Depreciation Produced Cost Cost Cost 4,000 shelves $40,000 $6,000 $120,000 18,000 Shelves 80,000 11,200 120,000 16,000 shelves 160,000 20,400 120,000 20,000 shelves 200,000 25.000 120,000 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these Lumber Variable Cost Utilities Mixed cost Depreciation Feed Cost b. For each cost, determine the forced portion of the cost and the per-unit variable cost. If there is no amount or an amount is zero, enter "o Recall that, for N-Number of Units Produced, Total Costs - (Variable Cost Per Unit N) + Fixed cost. Complete the following table with your answers. Round variable portion of cost (per unit) answers to two Hecimal places. Fixed Portion Variable Portion Cost of Cost of Cost (per unit) Lumber 1.15 0 X Utilities 0 Depreciation 120,000 MP, Chapter 20 Calculator High-Low B Files Company is the chief competitor of Cover to Cover Company in the bookshelf business. bio 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 Units Produced Total Cost January 4,360 units $65,600 February 275 6,250 March 1,000 15,000 April 8,775 176,250 May 1,750 32,500 June 3,015 48,000 . From the data previously provided, halo Bibilio Files company estimate the food and variable portions of its total cyts 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 Fleed 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 8.775 3. Why does the total cost computed for 4,360 units not match the data for January? a. The high-low method is accurate only for months in which production is a full capacity b. The high-low method only gives accurate data when faxed costs are zero. c. The high-low method gives a formula for the estimated total cost and may not match levels of production other than the highest and lowest d. The high-low method gives accurate data only for levels of production outside the relevant range MP, Chapter 20 Calculator Contribution Margin Review the contribution margin income statements for Cover to Cover Company and Shillo Files Company on their respective Income Statements. Complete the following table from the data provided on the income statements. Each company sold 80,800 units during the year Cover-to Cover Biblio Files Company Company Contribution margin ratio (percent) Unit contribution margin Break-even sales (units) Break even sales (dollars) Check My World Review the definitions of contribution margin ratio and unit contribution margie, Al review the formulas for even in terms of units sold and sales dollars. Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 2018 Sales $404,000 Variable costs: Manufacturing expense $242,400 Selling expense 20,200 Administrative expense 60,600 (323,200) Contribution margin $80,800 Fixed costs: Manufacturing expense Selling enese $5,000 4.00 Check My Work All AssignmentMandolinvokereta AsignmentSession Locatorprogresstale MP, Chapter 20 Calculator Printem Seding experts Administrative expense 4.000 11,200 (20,200) Operating income $60,600 Income Statement - Biblio Files Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 2018 Sales $400,000 Variable costs: Manufacturing expense $161,600 Selling expense 16,160 Administrative expense 64,640 (242.400) Contribution margin $161.600 Fixed costs: Manufacturing expense $83,000 Selling expense 8,000 Administrative expense 10,000 (101,000) $60,000 Operating income 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 Sales Price Variable Cost Bookshell per Unit 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 $379,570, Check My Work Emad Instructor Save and Ex All work saved Submit Augment for Grading men Main.do invokereta AssignmentSession Locatori progressatase MP, Chapter 20 Calcutor Penem Recall that the totals of all the sales mix percents must be 100%. Determine the amounts to complete the following table Type of Percent of Break Even Sales Break Even Sales Bookshell in Units in Dollars Deluxe Review the definition of break even point Recall that the combined unit contribution margin is given by Basic unit contribution margin) x (Basic percent of sales mix)] close unit contribution margin) percent of sales mix)]Since these percents must add up to 100%, we have the following: (Basic percent of sales mix) (Deluxe percent of sales ) - 100%, so that (Deluxe percent of sales mix) 100%-Base percent of sales mix) Target Profit Refer again to the income statements for Cover-to-Cover Company and BiblioFles Company on their respective Income Statement. Note that both companies have the same sales and net income. Answer questions (1) .) 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 $40,000 in the coming year what must their amount of sales be? 2. If BiblioFles Company wants to increase its profit by $40,000 in the coming yes what must their amount of sales be? 3. What would explain the difference between your answers for (1) and (2) Nolio Files Company has a higher contribution margin ratio, and so more of each sales dollar is available to cover fixed costs and provide operating income by Cover-to-Cover Company's contribution margin ratio is lower meaning that it's more efficient in its operations The companies have goals that are not in the relevant range, Check My Work MP, Chapter 20 Calculator Printem Mastery Problem: Cost-Volume Profit Analysis Cost Behavior 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 cont behavior. After reviewing the data, complete requirements (1) and (2) that follow. Total Total Total Machine Units Lumber Utilities Depreciation Produced Cost Cost Cost 4,000 shelves $40,000 $6,000 $120,000 18,000 Shelves 80,000 11,200 120,000 16,000 shelves 160,000 20,400 120,000 20,000 shelves 200,000 25.000 120,000 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these Lumber Variable Cost Utilities Mixed cost Depreciation Feed Cost b. For each cost, determine the forced portion of the cost and the per-unit variable cost. If there is no amount or an amount is zero, enter "o Recall that, for N-Number of Units Produced, Total Costs - (Variable Cost Per Unit N) + Fixed cost. Complete the following table with your answers. Round variable portion of cost (per unit) answers to two Hecimal places. Fixed Portion Variable Portion Cost of Cost of Cost (per unit) Lumber 1.15 0 X Utilities 0 Depreciation 120,000 MP, Chapter 20 Calculator High-Low B Files Company is the chief competitor of Cover to Cover Company in the bookshelf business. bio 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 Units Produced Total Cost January 4,360 units $65,600 February 275 6,250 March 1,000 15,000 April 8,775 176,250 May 1,750 32,500 June 3,015 48,000 . From the data previously provided, halo Bibilio Files company estimate the food and variable portions of its total cyts 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 Fleed 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 8.775 3. Why does the total cost computed for 4,360 units not match the data for January? a. The high-low method is accurate only for months in which production is a full capacity b. The high-low method only gives accurate data when faxed costs are zero. c. The high-low method gives a formula for the estimated total cost and may not match levels of production other than the highest and lowest d. The high-low method gives accurate data only for levels of production outside the relevant range MP, Chapter 20 Calculator Contribution Margin Review the contribution margin income statements for Cover to Cover Company and Shillo Files Company on their respective Income Statements. Complete the following table from the data provided on the income statements. Each company sold 80,800 units during the year Cover-to Cover Biblio Files Company Company Contribution margin ratio (percent) Unit contribution margin Break-even sales (units) Break even sales (dollars) Check My World Review the definitions of contribution margin ratio and unit contribution margie, Al review the formulas for even in terms of units sold and sales dollars. Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 2018 Sales $404,000 Variable costs: Manufacturing expense $242,400 Selling expense 20,200 Administrative expense 60,600 (323,200) Contribution margin $80,800 Fixed costs: Manufacturing expense Selling enese $5,000 4.00 Check My Work All AssignmentMandolinvokereta AsignmentSession Locatorprogresstale MP, Chapter 20 Calculator Printem Seding experts Administrative expense 4.000 11,200 (20,200) Operating income $60,600 Income Statement - Biblio Files Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 2018 Sales $400,000 Variable costs: Manufacturing expense $161,600 Selling expense 16,160 Administrative expense 64,640 (242.400) Contribution margin $161.600 Fixed costs: Manufacturing expense $83,000 Selling expense 8,000 Administrative expense 10,000 (101,000) $60,000 Operating income 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 Sales Price Variable Cost Bookshell per Unit 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 $379,570, Check My Work Emad Instructor Save and Ex All work saved Submit Augment for Grading men Main.do invokereta AssignmentSession Locatori progressatase MP, Chapter 20 Calcutor Penem Recall that the totals of all the sales mix percents must be 100%. Determine the amounts to complete the following table Type of Percent of Break Even Sales Break Even Sales Bookshell in Units in Dollars Deluxe Review the definition of break even point Recall that the combined unit contribution margin is given by Basic unit contribution margin) x (Basic percent of sales mix)] close unit contribution margin) percent of sales mix)]Since these percents must add up to 100%, we have the following: (Basic percent of sales mix) (Deluxe percent of sales ) - 100%, so that (Deluxe percent of sales mix) 100%-Base percent of sales mix) Target Profit Refer again to the income statements for Cover-to-Cover Company and BiblioFles Company on their respective Income Statement. Note that both companies have the same sales and net income. Answer questions (1) .) 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 $40,000 in the coming year what must their amount of sales be? 2. If BiblioFles Company wants to increase its profit by $40,000 in the coming yes what must their amount of sales be? 3. What would explain the difference between your answers for (1) and (2) Nolio Files Company has a higher contribution margin ratio, and so more of each sales dollar is available to cover fixed costs and provide operating income by Cover-to-Cover Company's contribution margin ratio is lower meaning that it's more efficient in its operations The companies have goals that are not in the relevant range, Check My Work