Q1) A company produces and sells a single product. The products current selling price per unit is $200 and variable expenses per unit are $40. Fixed expenses are $120,000 each month. The current sales level is 1,300 unites per month.

a) what is the company's break-even point each month in units? ___________

b) what is the company's current margin of safety in sales dollars?____________

c) if the company would like to achieve a profit of $28,000 during the month, how many units must it sell? (ignore taxes)___________

d) (i) calculate the company's current operating leverage. Round to 2 decimal places. (ii) If sales increase by 10% by how much will net operating income increase as a percentage?

(i) Operating leverage___________

(ii) Percentage increase in net operating income ____________

e) The company is thinking about using a different part in production that will result in a n$49 increase in variable expenses. This will lead to a monthly sales unit increase of 1,500 units. (i) what will that dollar change in net operating income compared to current net operating income if this occurs? (ii) should the company do this for financial perspective?

(i) Dollar change in net operating income (indicate amount and inc/dec)____________

(ii) Should the company do this from a financial perspective?___________

Q2) You are provided the following details regarding a company with two divisions (X and Y):

	X	Y	Total
Sales	?	$200,000	?
Variable Expenses	$120,000	$140,000	$260,000
Contribution Margin	?	?	?
Traceable fixed expenses	$100,000	$80,000	$180,000
segment margin	?	$(20,000)	?
common fixed expenses			$50,00
net operating income			$10,000

What is Sales for the total company?___________

Q3) A company has two divisions, X and Y. The following has been provided related to operation of those two divisions:

	X	Y	Total
Sales	$300,000	$200,000	$500,000
Variable Expenses	$120,000	$140,000	$260,000
Contribution Margin	$180,000	$60,000	$$240,000
Traceable fixed expenses	$100,000	$80,000	$180,000
segment margin	$80,000	$(20,000)	$60,000
common fixed expenses			$50,00
net operating income			$10,000

What dollar amount of sales must division Y earn to break-even at the segment level? Round to nearest dollar. _____________________

Q4) A company has tree operating expenses (A,B and C) and four related activities (Travel, Cleaning, customer service, and other). Information about consumption of the expenses by the activities is shown in the table below:

	Travel	Cleaning	Customer service	other
Expense A ($300,000)	45%	40%	10%	5%
Expense B ($120,000)	40%	50%	0%	10%
Expense C ($200,000)	20%	30%	355	15%

a) How much of Expense B will be allocated to the Travel Activity?_____________

b) How much total expense will be allocated to the cleaning activity?_____________

c) f there are expected to be 200,000 sq,Ft. cleaned, what is the cleaning activity rate per sq.Ft? Round to the nearest cent._______________

d) If a job requires 2,300 sq.Ft. to be cleaned, how much cleaning activity expense will be allocated to that job?