Q1) Green Valley Computer Services, Inc., has been in business for six months. The following are basic operating data of the period.

	Jan.	Feb.	March	April	May	June
Service Hours	120	136	260	420	320	330
Revenue	$6,000	6,800	13,000	21,000	16,000	16,500
Operating costs	4,200	5,200	7,000	11,100	9,000	10,500

Required:

a) What is the average service revenue per hour for the six-month time period?

b) Use the high-low method to estimate the total monthly fixed cost and the variable cost per hour.

c) Determine the average contribution margin per hour.

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Q2) The income statement for Sweet Dreams Company is divided by its two product lines, blankets and pillows, as follows:

	Blankets	Pillows	Total
Sales revenue	$620,000	$300,000	$920,000
Variable expenses	465,000	240,000	705,000
Contribution margin	155,000	60,000	215,000
Fixed expenses	76,000	76,000	152,000
Operating income (loss)	$79,000	$(16,000)	$63,000

Required:

a) If Sweet Dreams can eliminate fixed costs of $50,000 by dropping the pillow line, should it be dropped? Explain

b) If Sweet Dreams can eliminate fixed costs of $50,000 and increase the sale of blankets by 3,000 units at a selling price of $20 per unit and a contribution margin of $5 per unit, should it be dropped? Explain

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Q3)Print House, Inc., produces and sells laser jet printers for $1,400 each. The variable costs of each printer total $1,000 while total annual fixed costs are $300,000. Companys profit for 2008 is $200,000.

Required:

a) Compute the Companys break-even point in units and dollars.

b) What is the Companys margin of safety in units, dollars, and percentage?

c) Compute the Companys Sales for 2008.