Q1. High-Low Method

Tashiro Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows:

Units Produced	Total Costs
5,120			$367,360
1,920			236,160
3,380			277,620

a. Determine the variable cost per unit and the total fixed cost.

Variable cost (Round to two decimal places.)	$fill in the blank 1	per unit
Total fixed cost	$fill in the blank 2

b. Based on part (a), estimate the total cost for 2,530 units of production.

Total cost for 2,530 units:

$fill in the blank 3

Q2. Contribution Margin Ratio

a. Imelda Company budgets sales of $990,000, fixed costs of $60,100, and variable costs of $267,300. What is the contribution margin ratio for Imelda Company? (Enter your answer as a whole number.) fill in the blank 1 %

b. If the contribution margin ratio for Peppa Company is 50%, sales were $732,000, and fixed costs were $289,140, what was the income from operations? $fill in the blank 2

Q3. Break-Even Sales and Sales to Realize a Target Profit

For the current year ending October 31, Papadakis Company expects fixed costs of $669,900, a unit variable cost of $66, and a unit selling price of $99.

a. Compute the anticipated break-even sales (units). fill in the blank 1 units

b. Compute the sales (units) required to realize a target profit of $155,100. fill in the blank 2 units

Q4. Sales Mix and Break-Even Sales

Home Run Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $349,800, and the sales mix is 60% bats and 40% gloves. The unit selling price and the unit variable cost for each product are as follows:

Products	Unit Selling Price	Unit Variable Cost
Bats	$40		$30
Gloves	100		60

a. Compute the break-even sales (units) for the overall product, E. fill in the blank 1 units

b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point?

Baseball bats	fill in the blank 2 units
Baseball gloves	fill in the blank 3 units

Q5. Margin of Safety

a. If Del Rosario Company, with a break-even point at $554,400 of sales, has actual sales of $880,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number.

1. $fill in the blank 1

2. fill in the blank 2%

b. If the margin of safety for Del Rosario Company was 40%, fixed costs were $1,886,400, and variable costs were 60% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the break-even in sales dollars first.) $fill in the blank 3

Q6. Operating Leverage

Beck Inc. and Bryant Inc. have the following operating data:

	Beck Inc.	Bryant Inc.
Sales	$194,700		$568,000
Variable costs	78,100		340,800
Contribution margin	$116,600		$227,200
Fixed costs	63,600		85,200
Income from operations	$53,000		$142,000

a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place.

Beck Inc.	fill in the blank 1
Bryant Inc.	fill in the blank 2

b. How much would income from operations increase for each company if the sales of each increased by 20%? If required, round answers to nearest whole number.

	Dollars	Percentage
Beck Inc.	$fill in the blank 3	fill in the blank 4	%
Bryant Inc.	$fill in the blank 5	fill in the blank 6	%