Problem $2$

Cortez Company makes two types of backpacks. Data for the company's activity during a

typical month are presented below:

The company's fixed expenses are $$80,000.$

Required:

$($a$)$ Determine the overall company contribution margin ratio.

$($b$)$ Determine the break$-$even point for the company in terms of sales dollars if the sales mix

remains constant.

$($c$)$ Find the margin of safety in terms of sales dollars.

$($d$)$ If the sales mix is changed to $60,000$ units of the school model and $20,000$ units of the

hiker model, find the break$-$even point in terms of sales dollars.

Problem $3$

Jackson Company operates a cafeteria for its employees. The number of meals served each week

over the last seven weeks, along with the total costs of operating the cafeteria are given below:

Assume that the relevant range includes all of the activity levels mentioned in this problem.

Required:

$($a$)$ Using the high$-$low method of analysis, calculate the variable cost per meal served for ia

cafeteria costs.

$($b$)$ Calculate the fixed cost of the cafeteria.

$($c$)$ Construct a cost formula for total cafeteria costs.

$($d$)$ Estimate the total cafeteria costs to be incurred by Jackson Company if $1,720$ meals are

served.