Please see attachment as there is 5 questions.......

1. The Lakeshore Hotel's guest-days of occupancy and custodial supplies expense over the last seven months were: Month March April May June July August September Guest-Days of Occupancy 8,000 7,500 10,000 11,500 13,500 12,500 10,000 Custodial Supplies Expense $ 12,000 $ 11,700 $ 13,200 $ 14,100 $ 15,300 $ 14,700 $ 13,200 Guest-days is a measure of the overall activity at the hotel. For example, a guest who stays at the hotel for three days is counted as three guest-days. Required: 1. Using the high-low method, estimate a cost formula for custodial supplies expense. (Round the Variable cost per guest-day to 2 decimal points.) 2. Using the cost formula you derived above, what amount of custodial supplies expense would you expect to be incurred at an occupancy level of 11,500 guest-days? (Do not round your intermediate calculations.) 3. Prepare a scattergraph using the data given above. (Place custodial supplies expense on the vertical axis and guest-days on the horizontal axis. Round your plotting points to the nearest hundredth value.) Instructions: 1. On the graph below, use the point tool (Mar) to plot custodial supplies expense on the vertical axis and guest-days on the horizontal axis. 2. Repeat the same process for the plotter tools (Apr, May, June, July, Aug, Sep). 3. To enter exact coordinates, click on the point and enter the values of x and y. 4. To remove a point from the graph, click on the point and select delete option. 2. Nova Company's total overhead cost at various levels of activity are presented below: Month April May June July Machine-Hours 54,000 44,000 64,000 74,000 Total Overhead Cost $200,280 $178,080 $222,480 $244,680 Assume that the total overhead cost above consists of utilities, supervisory salaries, and maintenance. The breakdown of these costs at the 44,000 machine-hour level of activity is: Utilities (variable) Supervisory salaries (fixed) Maintenance (mixed) Total overhead cost $ 48,400 66,000 63,680 $ 178,080 Nova Company's management wants to break down the maintenance cost into its variable and fixed cost elements. Required: 1. Estimate how much of the $244,680 of overhead cost in July was maintenance cost. (Hint: To do this, it may be helpful to first determine how much of the $244,680 consisted of utilities and supervisory salaries. Think about the behavior of variable and fixed costs!) (Do not round intermediate calculations.) 2. Using the high-low method, estimate a cost formula for maintenance. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) 3. Express the company's total overhead cost in the linear equation form Y = a + bX. (Do not round your intermediate calculations. Round the "Variable cost per unit" to 2 decimal places.) 4. What total overhead cost would you expect to be incurred at an activity level of 49,000 machinehours?(Do not round intermediate calculations.) 3. Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.) Required: a. Assume that only one product is being sold in each of the four following case situations: Units Sold Sales Variable Expenses Fixed expenses Net Operating income (loss) Contribution Margin per unit Case 1 9,100 282,100 118,300 87,000 Case 2 Case 3 19,600 367,500 Case 4 4,100 135,300 215,600 160,000 89,900 176,800 $17 $13 77,000 (19,600) b. Assume that more than one product is being sold in each of the four following case situations: Sales Variable Expenses Fixed expenses Net Operating income (loss) Contribution Margin ratio Percent Case 1 451,100 Case 2 202,000 127,260 70,000 Case 3 87,950 472,000 77,050 45% 79% Case 4 305,000 85,400 3,600 4. Miller Company's most recent contribution format income statement is shown below: Sales (33,000 units) Variable expenses Total $264,000 165,000 Per Unit $8.00 5.00 Contribution margin 99,000 $3.00 Fixed expenses 48,000 Net operating income $ 51,000 Required: Prepare a new contribution format income statement under each of the following conditions (consider each case independently): (Do not round intermediate calculations. Round your "Per unit" answers to 2 decimal places.) 1. The number of units sold increases by 10%. 2. The selling price decreases by $1.10 per unit, and the number of units sold increases by 24%. 3. The selling price increases by $1.10 per unit, fixed expenses increase by $6,000, and the number of units sold decreases by 4%. 4. The selling price increases by 20%, variable expenses increase by 20 cents per unit, and the number of units sold decreases by 8%. 5. Menlo Company distributes a single product. The company's sales and expenses for last month follow: Sales Variabl Total $ 604,000 Per Unit $ 40 422,800 28 e expens es Contri bution margin Fixed expens es Net operatin g income 181,200 $ 12 146,400 $ 34,800 Required: 1. What is the monthly break-even point in unit sales and in dollar sales? Breakeven point in unit sales Break even point in sales dollars Units 2. Without resorting to computations, what is the total contribution margin at the break-even point? Total Contribution Margin 3-a. How many units would have to be sold each month to earn a target profit of $80,400? Use the formula method. Units Sold 3-b. Verify your answer by preparing a contribution format income statement at the target sales level. Income Statement Total Per unit 4. Refer to the original data. Compute the company's margin of safety in both dollar and percentage terms. Round your percentage answer to 2 decimal places (i.e .1234 should be entered as 12.34). Dollars Percent Margin of safety % 5. What is the company's CM ratio? If monthly sales increase by $72,000 and there is no change in fixed expenses, by how much would you expect monthly net operating income to increase? CM Ratio Net operating income increases by % 1) Guest Days High Level - July Low Level - April Change 13500 7500 6000 Change in Expenses Change in Activity Level Variable Cost Element Custodial Supplies Expenses at high level Less Variable Cost Eliment at High Level (13500 x 0.60) Total Fixed Cost 15300 8100 7200 So the Cost Formula = Fixed + (Variable Cost x Guest Days) Y = 7200 + (0.60 x X) 2) Custodial Supplied Expenses for 11500 Guest Days Variable Cost (0.60 x 11500) Fixed Cost Total Cost 6900 7200 14100 3) Month Guest Days of Occupancy March 8,000 April 7,500 May 10,000 June 11,500 July 13,500 August 12,500 September 10,000 Scatter Graph 16,000 15,500 15,000 14,700 14,500 14,100 14,000 Custodial Supplies Expenses 13,500 13,200 13,000 12,500 12,000 11,500 11,700 12,000 14,100 14,000 Custodial Supplies Expenses 13,500 13,200 13,000 12,500 12,000 11,700 12,000 11,500 11,000 7,000 8,000 9,000 10,000 11,000 Guest Days of Occupancy 12,000 13 Custodial Supplies Expenses 15300 11700 3600 3600 6000 0.6 Custodial Supplies Expenses 12,000 11,700 13,200 14,100 15,300 14,700 13,200 15,300 14,700 14,100 0 y 14,100 12,000 13,000 14,000 1) Calculation of Maintenance Cost at 74000 Machine Hour Level Machine Hour Activity Level Low - May 44000 178080 Machine Hour Total Factory Overhead Cost Less: Utility Cost @ 1.10 Supervisory Salaries (Fixed) Maintinance Cost 48400 66000 63680 Utility Cost 48400/44000 1.10 2) Machine Hour High Level - July Low Level - May Change 74000 44000 30000 Variable Cost Element Change in Expenses Change in Activity Level Total Maintenance Cost at High Level Less: Variable Cost Element at High Level (74000 x 1.12) Total Fixed cost 97280 82880 14400 So the Cost Formula = Fixed + (Variable Cost x Machine Hour) Y = 14400 + (1.12 x X) 3) Variable Cost Utilities (Variable) Supervisory Salaries (Fixed) Maintinance (Mix) Total Overhead Cost 1.10 1.12 2.22 So the Cost Formula = Fixed + (Variable Cost x Machine Hour) Y = 80400 + (2.22 x X) 4) Fixed Cost Variable Cost (49000 x 2.22) Total Overhead Cost 80400 108780 189180 r Activity Level High - July 74000 244680 81400 66000 97280 Maintenance Cost 97280 63680 33600 33600 30000 achine Hour) Fixed Cost achine Hour) 66000 14400 80400 1.12 Highlighted in Bold Blue Are the Missing Fiures a) Case 1 Amount Number of Units Sold Sales Less: Variable Expenses Contribution Margin Less: Fixed Expenses Net Operating Income (Loss) 1st Step is to Calculate 2nd Step 3rd Step b) 9100 282100 118300 163800 87000 76800 Contribution Margin = Sales - Variable Contribution Margin Per Unit Net Operating Income (Loss) Case 1 Amount Sales Less: Variable Expenses Contribution Margin Less: Fixed Expenses Net Operating Income (Loss) 451100 248105 202995 115045 87950 Per Unit Case 2 Amount Per Unit 14700 367500 117600 249900 160000 89900 31 13 18 25 8 17 Contribution Margin = Fixed + Operating Income Number of Units Sold = Contribution Margin / CM per unit Variable Exp = Sales - Contribution Margin % 100% 55% 45% Case 2 Amount 202000 127260 74740 70000 4740 % 100% 63% 37% Case 3 Amount Per Unit 19600 470400 215600 254800 78000 176800 24 11 13 CM = Units Sold x CM per Unit Sales = Variable Exp + CM Fixed Exp = CM - Operating Profit Case 3 Amount 695000 145950 549050 472000 77050 Case 4 Amount Per Unit 4100 135300 33 77900 19 57400 14 77000 -19600 CM = Fixed Exp - Operating Loss Variable Exp = Sales - CM CM per unit = CM/Units Sold % 100% 21% 79% Case 4 Amount % 305000 100% 85400 28% 219600 72% 216000 3600 1) The number of units sold increases by 10% Contribution format income statement Unit Sold (33000 x 110% = 36300) Sales Less: Variable Expenses Contribution Margin Fixed Expenses Net Operating Income Amount Per Unit 36300 290400 8 181500 5 108900 3 48000 60900 2) The selling price decreases by $1.10 per unit, and the number of units sold increases by 24%. Contribution format income statement Amount Per Unit Unit Sold (33000 x 124% = 40920) 40920 Sales 282348 6.9 Less: Variable Expenses 204600 5 Contribution Margin 77748 1.9 Fixed Expenses 48000 Net Operating Income 29748 3) The selling price increases by $1.10 per unit, fixed expenses increase by $6,000, and the number of units sold de Contribution format income statement Amount Per Unit Unit Sold (33000 x 96% = 31680) 31680 Sales 288288 9.1 Less: Variable Expenses 158400 5 Contribution Margin 129888 4.1 Fixed Expenses 54000 Net Operating Income 75888 4) The selling price increases by 20%, variable expenses increase by 20 cents per unit, and the number of units sold Contribution format income statement Amount Per Unit Unit Sold (33000 x 92% = 30360) 30360 Sales (33000 x 92% = 30360) 291456 9.6 Less: Variable Expenses 157872 5.2 Contribution Margin 133584 4.4 Fixed Expenses 48000 Net Operating Income 85584 ases by 24%. and the number of units sold decreases by 4%. it, and the number of units sold decreases by 8%. 1) Breakeven point in unit sales Break even point in sales dollars 12200 Units 488000 Working: Breakeven point in unit sales = Fixed Expenses Per Unit Contribution Margin 146400 12 Break even point in sales dollars = Fixed Expenses Contribution Margin Ratio 146400 30% Contribution Margin Ratio (Contributiom / Sales) x 100 30% 2) Total Contribution Margin 146400 Working: Breakeven Point Sales (units) Contribution Margin Total Contribution Margin 122200 12 1466400 3) a Units Sold 18900 Working: Unit Sales to earn target profit = Target Profit + Fixed Expenses Per unit Contribution Margin 80400 + 146400 12 3) b Income Statement Amount Sales Less: Variable Expenses Contribution Margin Less Fixed Expenses Net Operating Income Per Unit 756000 529200 226800 146400 80400 40 28 12 4) Dollars Margin of safety Working: Percent 116000 19.21% Amount Current Sales (604000/40 = 15100 Units) Breakeven Sales (12200 Units) Margin of Safety in Dollars Margin of Safety in % Per Unit 604000 488000 116000 19.21% 40 40 5) CM Ratio Net operating income increases by 30% % 21600 Working: Amount Sales (676000/40 = 16900 Units) Less: Variable Expenses Contribution Margin Less: Fixed Expenses Net Operating Income Per Unit 676000 473200 202800 146400 56400 40 28 12 12200 488000 226800 12 18900 Comtribution Margin Ratio 100% 70% 30%