Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please only answer questions below photo A. Based on the CVP analysis: 1. explain the results for the breaking point, margin of safety ratio and

Please only answer questions below photo image text in transcribed

A. Based on the CVP analysis:

1. explain the results for the breaking point, margin of safety ratio and cvp income statement

2. provide two reasons (benefits or drawbacks) for making the changes recommended by hakim

B. Explain and compare the per unit and the total cost behavior for fixed cost.

1. Provide and explain 2 examples for per unit cost behavior for fixed cost

2. provide and explain 2 examples for the total cost behavior for fixed costs.

Ch18 Case Study Assignment - Part 2 Cost-Volume-Profit Analysis Problem Hakim is the manager for Tahoe Bed and Breakfast. Hakim is currently considering an upgrade to the breakfast service to attract more business that will add \$ 3 in variable costs to Tahoe's current variable costs of \$15. Hakim is also proposing that a 10% room rate increase (from $60 to $66 per room) will produce an increase in room rentals from 3,500 to 4,000 units. Fixed costs will remain at $126,000 for Tahoe. 1. Prepare the Break-even point and Margin of Safety Ratio for Tahoe. 2. Prepare the CVP Income Statement (Totals) for Tahoe. \begin{tabular}{l|c|c|c|} \multicolumn{1}{l|}{ CVP Income Statement: } & After Changes & Increase/Decrease to Profit/Loss \\ Sales revenes & $210,000 & $264,000 & increase \\ \cline { 2 - 4 } Less: Variable costs & ($52,500) & ($72,000) & decrease \\ \hline Contribution margin & $157,500 & $192,000 & increase \\ \hline Less: Fixed costs & ($126,000) & ($126,000) & no change \\ Profit/Loss & $31,500 & $66,000 & increase \\ \hline \end{tabular} Ch18 Case Study Assignment - Part 2 (Total 10pts) How Do I Write my Posting? ( 150 words - 5pts; Completed Problem - 2pts; Total 7pts): Sheet 1

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image_2

Step: 3

blur-text-image_3

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Managerial Accounting 1

Authors: Ray H. Garrison

1st Edition

1259114457, 978-1259114458

More Books

Students also viewed these Accounting questions