Your Answers Must Be Typed, Labeled, And Circled Show Your W

Your Answers Must Be Typed Labeled And Circled Show Your Work To

Your answers must be typed, labeled, and circled show your work to support your answers!!!! 1. (4 POINTS) THE NEW AMERICAN DOLL HAS AN EXPECTED SELLING PRICE PER DOLL OF $69.50, THE PROJECTED VARIABLE COST PER UNIT IS $27.80 AND ESTIMATED FIXED COSTS PER MONTH ARE $48,900. CALCULATE THE BREAKEVEN POINT IN SALES DOLLARS. 2. (8 POINTS) CURRENT OPERATIONS FOR GOODYEAR MANUFACTURING SHOW : SELLING PRICE PER UNIT $ 85 VARIABLE COST PER UNIT 30.60 TOTAL FIXED COST 232,000 IF GOODYEAR MANUFACTURING CAN ACHIEVE A $8,000 REDUCTION IN FIXED COSTS, CALCULATE AND STATE HOW MUCH THE BREAKEVEN SALES WILL (DECREASE) OR INCREASE BY. (YOU MUST INDICATE THE AMOUNT AND YOU MUST INDICATE WHETHER THE BREAKEVEN SALES INCREASES OR DECREASES) 3. (4 POINTS) SUNLIGHT, INC. IS CONSIDERING THE PRODUCTION AND SALE OF SOLAR LAMPS. ANNUAL FIXED COSTS ASSOCIATED WITH THE PROJECT ARE EXPECTED TO TOTAL $98,800. IN ADDITION, EACH LAMP WOULD SELL FOR $125 AND WOULD REQUIRE $65 IN VARIABLE COSTS. CALCULATE THE NUMBER OF SOLAR LAMPS THAT MUST BE SOLD TO EARN A PROFIT OF $320,000. 4. (4 POINTS) SUPPOSE FIXED COSTS ARE $35,000, VARIABLE COSTS PER UNIT ARE $21, AND THE PRODUCT SELLS FOR $77. WHAT IS THE CONTRIBUTION MARGIN PER UNIT? 5. (4 POINTS) DURING THIS PAST YEAR, A SMALL PUBLISHING COMPANY SOLD 60,000 COPIES OF SUPER TRAVEL PAPERBACKS (THEIR ONLY PRODUCT) AT $10.50 PER BOOK; TOTAL FIXED COSTS WERE $62,464; AND TOTAL VARIABLE COSTS WERE $4.40 PER BOOK. WHAT IS THIS COMPANY’S BREAKEVEN POINT IN UNITS? 6. (4 POINTS) PIZZA HUT INC. WISHES TO MAKE A PROFIT OF $150,000 IN THE COMING YEAR. THEIR LARGE PIZZAS SELLS FOR $22.75 A UNIT, WITH AN $8.60 CONTRIBUTION MARGIN PER UNIT. FIXED COSTS ARE PROJECTED TO BE $222,337. COMPUTE THE NUMBER OF PIZZAS /UNITS) NEEDED TO REACH THE DESIRED PROFIT. 7. (5 POINTS) IN 2010, SELF MAGAZINE COMPANY HAD BREAKEVEN SALES OF $1,280,500 BASED ON A SELLING PRICE OF $12 PER UNIT AND FIXED COSTS OF $537,810. IN 2011, THE SELLING PRICE AND VARIABLE COSTS PER UNIT DID NOT CHANGE, BUT THE BREAKEVEN SALES INCREASED TO $1,884,000. CALCULATE THE FIXED COSTS FOR 2011. CONTINUES ON THE NEXT PAGE 8. (8 POINTS) IN 2010 GROUPON REPORTED BREAKEVEN SALES OF $3,800,000. FIXED COSTS WERE $1,102,000. REQUIRED: COMPUTE THE CONTRIBUTION MARGIN RATIO (CMR) AND COMPUTE THE VARIABLE COST RATIO (VCR). 9. (20 POINTS) THE FOLLOWING INFORMATION IS AVAILABLE FOR AMERICAN APPAREL’S NEW PRODUCT LINE: VARIABLE COSTS PER UNIT: DIRECT MATERIALS $15.80 DIRECT LABOR 11.60 MANUFACTURING OVERHEAD 18.40 SELLING COSTS 8.20 FIXED COST ESTIMATES: PRODUCTION COSTS $212,400 SELLING AND ADMINISTRATIVE COSTS 417,600 AMERICAN APPAREL CO. SELLS ITS PRODUCT FOR $90.00 PER UNIT. THERE WERE NO INVENTORIES AT THE BEGINNING OF THE YEAR. DURING THE YEAR, 20,900 UNITS WERE PRODUCED AND SOLD. REQUIRED: (A) PREPARE A CONTRIBUTION FORMAT INCOME STATEMENT FOR THE YEAR DECEMBER 31, 2010. (B) CALCULATE THE CONTRIBUTION MARGIN RATIO (C) CALCULATE THE CONTRIBUTION MARGIN PER UNIT 10. (6 POINTS) PASADENA MANUFACTURING LEASES A VACUUM CLEANING SYSTEM FOR A BASIC MONTHLY FEE PLUS AN ADDITIONAL COST PER HOUR USED ABOVE A GIVEN MINIMUM FOR EACH MONTH. GIVEN BELOW IS THE INFORMATION FOR THE MOST RECENT SIX-MONTH PERIOD ON THE NUMBER OF MACHINE HOURS OF USE AND THE TOTAL COST UNDER THIS LEASE. REQUIRED: DETERMINE THE FIXED COST AND VARIABLE COST PER UNIT USING THE HIGH/LOW METHOD. (SHOW ALL WORK) CONTINUES ON THE NEXT PAGE 11. (5 POINTS) THE DELIVERY TRUCKS OF LITTLE ITALY’S PIZZERIA INCURRED MAINTENANCE COSTS OF $2,400 DURING ITS BUSIEST MONTH OF 2012, IN WHICH 8,000 MILES WERE DRIVEN COLLECTIVELY. DURING ITS SLOWEST MONTH, $1,800 IN MAINTENANCE COSTS WERE INCURRED, RESULTING FROM 5,000 MILES BEING DRIVEN. USING THE HIGH-LOW METHOD, HOW MUCH WOULD THE COMPANY EXPECT TO INCUR IN MAINTENANCE COSTS IF THE RECORDED MILEAGE WAS 7,900. 12. (4 POINTS) PANDORA JEWELRY SOLD 32,000 CHARM BRACELETS IN MAY AT $90 PER UNIT. COST OF GOODS SOLD MADE UP 55% OF THE TOTAL VARIABLE EXPENSES OF $36 PER UNIT. COMPUTE THE TOTAL VARIABLE EXPENSES. 13.(6 POINTS) THE GAP COMPANY HAS THE FOLLOWING DATA FOR SELLING SCARFS. SALES IN UNITS...................... 9,800 VARIABLE COST PER UNIT................$ 5.06 FIXED COSTS........................... $46,644 SELLING PRICE PER UNIT................$ 23.00 REQUIRED: COMPUTE THE MARGIN OF SAFETY DOLLARS ; AND THE MARGIN OF SAFETY UNITS. 14. (9 POINTS) McDONALD SELLS THREE SIZES OF COFFEE. LARGE, MEDIUM, AND SMALL, WITH A SALE MIX OF 3:1:4. THE COMPANY’S FIXED COSTS ARE $72,875. PRODUCT DATA INCLUDE THE FOLLOWING: UNIT UNIT SALES PRICE VARIABLE COSTS LARGE $ 1.40 $ .70 MEDIUM 1.25 .65 SMALL 1.00 .35 CALCULATE HOW MANY CUPS OF COFFEE MUST BE SOLD OF EACH SIZE N ORDER TO BREAKEVEN. NOTE: THIS IS A SALES MIX-WTG.CONTRIBUTION MARGIN PROBLEM- (TAKE THE WTG. CONTRIBUTION RATE OUT TO FOUR DECIMAL PLACES) 15. (8 POINTS) A DIGITIZED MUSIC TUNER HAS BEEN A STAPLE IN SMOOTH SOUNDS PRODUCT LINE FOR SEVERAL YEARS. ANNUAL FIXED COSTS OF PRODUCTION AND ADMINISTRATION RELATED TO THIS PRODUCT IN THE PAST HAVE BEEN $989,800. VARIABLE COSTS OF PRODUCTION AND SALES HAVE BEEN $42 PER UNIT. THE SELLING PRICE IN THE PAST HAS BEEN $140 PER UNIT. BASED ON THE APPEARANCE OF COMPETING PRODUCTS ON THE MARKET, MANAGEMENT HAS ASKED YOU TO DO THE FOLLOWING: A. COMPUTE THE BREAKEVEN POINT IN UNITS FOR THE PRESENT PRODUCT. B. COMPUTE THE BREAKEVEN POINT IN UNITS IF THE VARIABLE COSTS INCREASED BY $3 PER UNIT AND THE FIXED COSTS INCREASED BY $17,235 PER MONTH. BONUS QUESTION (2POINTS) MAC ENTERPRISES HAS SALES REVENUE OF $860,000 FOR 2012. THEIR PRODUCT SELLS FOR $20 AND HAS A 40 PERCENT CONTRIBUTION MARGIN. FIXED COSTS ARE $120,000. WHAT IS MAC ENTERPRISES’ OPERATING INCOME FOR 2010?

Paper For Above instruction

The assignment encompasses a comprehensive set of managerial accounting problems, primarily focusing on break-even analysis, contribution margin calculations, profit planning, and cost behavior analysis across various business scenarios. The tasks include calculating break-even sales in units and dollars, analyzing cost reductions' impact on break-even points, determining required sales to achieve specific profit targets, and assessing the impact of fixed and variable costs in different contexts. Additionally, it involves preparing contribution margin income statements, applying the high/low method to separate fixed and variable costs, and performing sales mix calculations for different product sizes. The problems also cover identifying margin of safety in both units and dollars, and calculating operating income based on sales revenue and contribution margins. This collection of exercises aims to reinforce understanding of key managerial accounting concepts such as cost-volume-profit (CVP) analysis, contribution margin ratios, and the effects of cost behaviors on profitability and financial planning.

Answer to the assignment problems

1. Breakeven Point in Sales Dollars for the American Doll

Given Data:

- Selling price per doll = $69.50

- Variable cost per doll = $27.80

- Fixed costs per month = $48,900

Calculate contribution margin per unit:

Contribution margin per unit = Selling price - Variable cost = $69.50 - $27.80 = $41.70

Calculate the breakeven sales in dollars:

Breakeven sales = Fixed costs / Contribution margin ratio

Contribution margin ratio = Contribution margin per unit / Selling price = $41.70 / $69.50 ≈ 0.5993

Breakeven sales in dollars = $48,900 / 0.5993 ≈ $81,529.20

Answer: The breakeven sales in dollars is approximately $81,529.20.

2. Impact of Fixed Cost Reduction on Breakeven Sales for Goodyear Manufacturing

Given Data:

- Selling price per unit = $85

- Variable cost per unit = $30.60

- Original fixed costs = $232,000

- Fixed cost reduction = $8,000

Calculate original contribution margin per unit:

Contribution margin per unit = $85 - $30.60 = $54.40

Calculate original breakeven sales in units:

Breakeven units = Fixed costs / Contribution margin per unit = $232,000 / $54.40 ≈ 4,264.71 units

Calculate new fixed costs:

New fixed costs = $232,000 - $8,000 = $224,000

Calculate new breakeven sales in units:

New breakeven units = $224,000 / $54.40 ≈ 4,117.65 units

Determine change in units:

Change = 4,264.71 - 4,117.65 ≈ 147.06 units

Since fixed costs decrease, breakeven sales decrease.

Answer: Breakeven sales decrease by approximately 147 units.

3. Solar Lamps Sales Needed for Profit of $320,000

Given Data:

- Fixed costs = $98,800

- Selling price per lamp = $125

- Variable cost per lamp = $65

- Desired profit = $320,000

Calculate contribution margin per unit:

Contribution margin per lamp = $125 - $65 = $60

Calculate required sales in units:

Required units = (Fixed costs + Desired profit) / Contribution margin per unit

= ($98,800 + $320,000) / $60 ≈ 418,800 / 60 ≈ 6,980 lamps

Answer: Approximate 6,980 solar lamps must be sold to earn a $320,000 profit.

4. Contribution Margin Per Unit

Given Data:

- Fixed costs = $35,000

- Variable costs per unit = $21

- Selling price per unit = $77

Calculation:

Contribution margin per unit = Selling price - Variable costs = $77 - $21 = $56

Answer: The contribution margin per unit is $56.

5. Breakeven Point in Units for the Publishing Company

Given Data:

- Units sold = 60,000

- Selling price per book = $10.50

- Fixed costs = $62,464

- Variable cost per book = $4.40

Calculate contribution margin per unit:

Contribution margin = Sale price - Variable cost = $10.50 - $4.40 = $6.10

Calculate breakeven units:

Breakeven units = Fixed costs / contribution margin per unit =

$62,464 / $6.10 ≈ 10,245 units

Answer: The breakeven point is approximately 10,245 units.

6. Number of Pizzas Needed to Achieve Target Profit

Given Data:

- Fixed costs = $222,337

- Desired profit = $150,000

- Selling price per pizza = $22.75

- Contribution margin per pizza = $8.60

Calculate total contribution margin needed:

Total contribution = Fixed costs + Profit = $222,337 + $150,000 = $372,337

Calculate units needed:

Units = Total contribution / contribution margin per unit = $372,337 / $8.60 ≈ 43,291 pizzas

Answer: Approximately 43,291 pizzas must be sold to reach the profit goal.

7. Fixed Costs for 2011 for Self Magazine

Given Data:

- 2010 breakeven sales = $1,280,500

- Selling price per unit = $12

- Fixed costs in 2010 = $537,810

- 2011 breakeven sales = $1,884,000

- Constant selling price and variable costs

Calculate the contribution margin per unit:

CM per unit = Selling price - Variable costs

But variable costs are not provided directly. Instead, consider:

Breakeven sales in units in 2010:

Units = $1,280,500 / $12 ≈ 106,708 units

Using fixed costs:

Fixed costs = Contribution margin per unit × units at breakeven

= $537,810

Therefore, contribution margin per unit = $537,810 / 106,708 ≈ $5.04

Now, using 2011 breakeven sales:

Units = $1,884,000 / $12 = 157,000 units

Fixed costs in 2011:

Fixed costs = contribution margin per unit × units - contribution margin × units at breakeven

= $5.04 × 157,000 ≈ $790,800

Answer: Fixed costs for 2011 are approximately $790,800.

8. Contribution Margin Ratio and Variable Cost Ratio for Groupon

Given Data:

- Break-even sales = $3,800,000

- Fixed costs = $1,102,000

Before calculating, find contribution margin ratio (CMR):

Total contribution margin = Sales - Fixed costs (at breakeven)

Contribution margin ratio (CMR) = Fixed costs / Sales

= $1,102,000 / $3,800,000 ≈ 0.2900 or 29.00%

Therefore, the contribution margin ratio (CMR) is approximately 29.00%.

The variable cost ratio (VCR) = 1 - CMR = 1 - 0.2900 = 0.7100 or 71.00%

Answer: CMR ≈ 29.00%, VCR ≈ 71.00%.

9. Income Statement and Contributions for American Apparel

Given Data:

- Variable costs per unit:

- Direct materials: $15.80

- Direct labor: $11.60

- Manufacturing overhead: $18.40

- Selling costs: $8.20

- Fixed costs:

- Production: $212,400

- Selling & admin: $417,600

- Selling price per unit: $90.00

- Units sold: 20,900

Calculate total variable costs:

Total variable costs per unit = $15.80 + $11.60 + $18.40 + $8.20 = $53.20

Total variable costs = 20,900 units × $53.20 ≈ $1,112,880

Calculate total sales:

Total sales = 20,900 × $90 = $1,881,000

Contribution margin = Total sales - Total variable costs = $1,881,000 - $1,112,880 ≈ $768,120

Contribution margin ratio = Contribution margin / Total sales ≈ $768,120 / $1,881,000 ≈ 0.4085 or 40.85%

Contribution margin per unit = $90 - $53.20 = $36.80

Contribution format income statement:

Total Sales: $1,881,000

Less: Variable Expenses: $1,112,880

Contribution Margin: $768,120

Less: Fixed Expenses:

- Production costs: $212,400

- Selling & admin: $417,600

Total Fixed Expenses: $630,000

Net Operating Income: $138,120

Answer: The contribution margin ratio is approximately 40.85%, and contribution margin per unit is $36.80. The net operating income is approximately $138,120.

10. Fixed and Variable Costs per Unit using High/Low Method

Given Data:

- Highest activity: 1,200 hours, $3,600 cost

- Lowest activity: