Old MathJax webview

Old MathJax webview

a) Describe the assumptions of Cost-Volume-Profit (CVP) analysis. [2.5] b) Mitchel Island Corp. has the following data for its maintenance costs for the past [5] 6 months. Units Total Cost Produced March 10000 22000 16000 32500 May 22000 43000 June 18000 36000 July 25000 48250 August 14000 29000 April Instructions Compute the variable and fixed cost elements using the high-low method. Also, compute the total maintenance cost if the activity level is 30000 units. a. Compute the following. [5] i. ii. Presto Corp. had total variable costs of $180,000, total fixed costs of $110,000, and total revenues of $300,000. Compute the required sales in dollars to break even. [1] Rice Company has a unit selling price of $520, variable costs per unit of $286, and fixed costs of $163,800. Compute the break-even point in units using (a) the mathematical equation and (b) unit contribution margin. [2] For Flynn Company, variable costs are 70% of sales, and fixed costs are $195,000. Management's net income goal is $75,000. Compute the iii. 3 required sales in dollars needed to achieve management's target net income of $75,000. (Use the contribution margin approach) b) Mitchel Island Corp. has the following data for its maintenance costs for the past [5] 6 months. Units Total Cost Produced March 10000 22000 April 16000 32500 May 22000 43000 June 18000 36000 July 25000 48250 August 14000 29000 Instructions Compute the variable and fixed cost elements using the high-low method. Also, compute the total maintenance cost if the activity level is 30000 units. a. Compute the following. [5] i. ii. Presto Corp. had total variable costs of $180,000, total fixed costs of $110,000, and total revenues of $300,000. Compute the required sales in dollars to break even. [1] Rice Company has a unit selling price of $520, variable costs per unit of $286, and fixed costs of $163,800. Compute the break-even point in units using (a) the mathematical equation and (b) unit contribution margin. [2] For Flynn Company, variable costs are 70% of sales, and fixed costs are $195,000. Management's net income goal is $75,000. Compute the iii. 3 required sales in dollars needed to achieve management's target net income of $75,000. (Use the contribution margin approach)