QUESTION 1

HighLow 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 6,000 $604,800 2,000 388,800 3,760 417,310 Costs that tend to remain the same in amount, regardless of variations in the level of activity. 3. Determine the variable cost per unit and the total xed cost. Variable cost (Round to two decimal places.) $:] per unit Total fixed cost $:] ' b. Based on part (a), estimate the total cost for 2,880 units of production. Total cost for 2,880 units: $:] Contribution Margin and Contribution Margin Ratio For a recent year, Wicker Company-owned restaurants had the following sales and expenses (in millions): Sales $30,900 Food and packaging $12,339 Payroll 7,800 Occupancy (rent, depreciation, etc.) 5,331 General, selling, and administrative expenses 4,500 $29,970 Income from operations $930 Assume that the variable costs consist of food and packaging; payroll; and 40% of the general, selling, and administrative expenses. 3. What is Wicker Company's contribution margin? Round to the nearest million. (Give answer in millions of dollars.) b. What is Wicker Company's contribution margin ratio? Round your answer to one decimal place. c. How much would income from operations increase if samestore sales increased by $1,900 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million. $:] million BreakEven Sales and Sales to Realize a Target Profit For the current year ending October 31, Papadakis Company expects fixed costs of $551,200, a unit variable cost of $52, and a unit selling price of $78. a. Compute the anticipated break-even sales (units). b. Compute the sales (units) required to realize a target profit of $127,400. BreakEven Sales Currently, the unit selling price of a product is $240, the unit variable cost is $200, and the total xed costs are $476,000. A proposal is being evaluated to increase the unit selling price to $270. 3. Compute the current break-even sales (units). b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased to the proposed $270, and all costs remain constant. Sales Mix and BreakEven Sales Home Run Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $275,400, and the sales mix is 40% bats and 60% gloves. The unit selling price and the unit variable cost for each product are as follows: Products Unit Selling Price Unit Variable Cost Bats $50 $40 Gloves 130 80 3. Compute the break-even sales (units) for the overall product, E. b. How many units of each product, baseball bats and baseball gloves, would be sold at the breakeven point? Baseball bats :] units :1 Baseball gloves units Margin of Safety a. If Del Rosario Company, with a breakeven point at $531,200 of sales, has actual sales of $830,000, 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- 14:] b. If the margin of safety for Del Rosario Company was 45%, fixed costs were $1,871,100, and variable costs were 55% of sales, what was the amount of actual sales (dollars)? (Hint: Determine the breakeven in sales dollars first.) $:] Operating Leverage Beck Inc. and Bryant Inc. have the following operating data: Beck Inc. Bryant Inc. Sales $147,000 $428,000 Variable costs 59,000 256,800 Contribution margin $88,000 $171,200 Fixed costs 48,000 64,200 Income from operations $40,000 $107,000 a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place. 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 Beck Inc. Bryant Inc. number. Dollars Percentage c. The difference in the ' of income from operations is clue to the difference in the operating leverages. Beck Inc.'s ' operating leverage means that its fixed costs are a ' percentage of contribution margin than are Bryant Inc.'s