need solutions for the attached, problem 5-2A #'s 1-2, and problem 5-4A #'s 1-5
Alden Co.'s monthly unit sales and total cost data for its operating activities of the past year follow. Problem 5-2A Management wants to use these data to predict future fixed and variable costs. Cost behavior estimation- high-low P1 Month Units Sold Total Cost Month Units Sold Total Cost 320,000 $160,000 340,000 $220,000 160.000 100,000 280,000 160,000 280,000 220,000 80,000 64,000 200.000 100,000 10 160,000 140,000 300.000 230,000 100,000 100,000 200,000 120,000 110,000 80,000 1 3 11 12 Required 1. Estimate both the variable costs per unit and the total monthly fixed costs using the high-low method. 2. Use the results from part I to predict future total costs when sales volume is (a) 200,000 units and (b) 300,000 units. Problem 5-4A Break-even analysis: income targeting and forecasting C2 A1 P2 Astro Co. sold 20,000 units of its only product and incurred a $50,000 loss (ignoring taxes) for the current year, as shown here. During a planning session for year 2020's activities, the production manager notes that variable costs can be reduced 50% by installing a machine that automates several operations. To obtain these savings, the company must increase its annual fixed costs by $200,000. The maximum output capacity of the company is 40,000 units per year. Contribution Margin Income Statement For Year Ended December 31, 2019 Sales Variable costs Contribution margin Fixed costs Net loss $1,000,000 800,000 200,000 250,000 150,000) Check (3) Net income $150,000 Required 1. Compute the break-even point in dollar sales for 2019. 2. Compute the predicted break-even point in dollar sales for 2020 assuming the machine is installed and there is no change in the unit selling price. 3. Prepare a forecasted contribution margin income statement for 2020 that shows the expected results with the machine installed. Assume that the unit selling price and the number of units sold will not change, and no income taxes will be due. 4. Compute the sales level required in both dollars and units to earn $200,000 of target pretax income in 2020 with the machine installed and no change in unit sales price. Round answers to whole dollars and whole units. 5. Prepare a forecasted contribution margin income statement that shows the results at the sales level computed in part 4. Assume no income taxes will be due. (4) Required sales $1,083,333 or 21.667 units both rounded