acct 212 homework 5 chapter 22acct 212 homework 5 chater 22.

award:

3 out of

3.00 points

Exercise 22-5 Predicting sales and variable costs using contribution

margin L.O. C2

Orlando

Company management predicts that it will incur fixed costs of $256,000 and

earn pretax income of $443,600 in the next period. Its expected contribution

margin ratio is 66%.

1.

Compute

the amount of total dollar sales. (Omit

the “$” sign in your response.)

2.

Compute

the amount of total variable costs. (Omit the

“$” sign in your response.)

2.

award:

3 out of

3.00 points

Exercise 22-7 Cost behavior estimationscatter diagram and high-low L.O.

P1

Felix

& Co. reports the following information about its sales and cost of

sales.

Period

Units

Sold

Cost of

Sales

Period

Units

Sold

Cost of

Sales

1.

0

$

2,690

6.

2,190

5,690

2.

590

3,290

7.

2,590

6,290

3.

990

3,890

8.

2,990

6,890

4.

1,390

4,490

9.

3,390

7,490

5.

1,790

5,090

10.

3,790

8,754

Use the

high-low method to calculate the variable component of the cost of sales. (Round your answer to 2 decimal places. Omit the

“$” sign in your response.)

Use the

high-low method to calculate the fixed component of the cost of sales. (Omit the “$” sign in your response.)

eBook

LinkView Hint #1

3.

award:

3 out of

3.00 points

Exercise 22-9 Contribution margin L.O.A2

A pants

maker is designing a new line of pants called the Redbird. The pants will

sell for $330 per pair and cost $260.70 per pair in variable costs to

make.

(1)

Compute

the contribution margin per pair. (Round your

answer to 2 decimal places. Omit the “$” sign in your response.)

(2)

Compute

the contribution margin ratio. (Round your

intermediate calculation to 2 decimal places. Omit the “%” sign in

your response.)

4.

award:

3 out of

3.00 points

Exercise 22-12 Income reporting and break-even analysis L.O. C2

Apollo

Company manufactures a single product that sells for $310 per unit and whose

total variable costs are $248 per unit. The companys annual fixed costs are

$992,000.

(1)

Prepare

a contribution margin income statement for Apollo Company at the break-even

point. (Leave no cells blank – be certain to

enter “0” wherever required. Input all amounts as positive values.

Omit the “$” sign in your response.)

(2)

Assume

if the companys fixed costs increase by $145,000, what amount of sales (in

dollars) is needed to break even? (Omit the

“$” sign in your response.)

eBook LinkView Hint #1

Worksheet

Difficulty: Medium

Exercise 22-12 Income reporting and break-even analysis L.O. C2

Learning Objective: 22-C2 Describe several applications of

cost-volume- profit analysis.

5.

award:

3 out of

3.00 points

Exercise 22-13 Computing sales to achieve target income L.O. C2

Apollo

Company manufactures a single product that sells for $280 per unit and whose

total variable costs are $224 per unit. The company targets an annual

after-tax income of $980,000. The company is subject to a 30% income tax

rate. Assume that fixed costs remain at $879,200.

(1)

Compute

the unit sales to earn the target after-tax net income.

(2)

Compute

the dollar sales to earn the target after-tax net income. (Omit the “$” sign in your response.)

eBook LinkView Hint #1

Worksheet

Difficulty: Hard

Exercise 22-13 Computing sales to achieve target income L.O. C2

Learning Objective: 22-C2 Describe several applications of

cost-volume- profit analysis.

6.

award:

3 out of

3.00 points

Exercise 22-14 Forecasted income statement L.O. C2

Apollo

Company manufactures a single product that sells for $113 per unit and whose

total variable costs are $102 per unit. The companys annual fixed costs are

$626,000. The sales manager predicts that annual sales of the companys

product will soon reach 39,600 units and its price will increase to $196 per

unit. According to the production manager, the variable costs are expected to

increase to $136 per unit but fixed costs will remain $626,000. The income

tax rate is 40%.

What

amounts of pretax and after-tax income can the company expect to

earn from these predicted changes? (Omit

the “$” sign in your response.)

eBook LinkView Hint #1

7.

award:

3 out of

3.00 points

Exercise 22-15 Predicting unit and dollar sales L.O. C2

Greenspan

Company management predicts $520,000 of variable costs, $820,000 of fixed

costs, and a pretax income of $172,000 in the next period. Management also

predicts that the contribution margin per unit will be $62.

(1)

Compute

the total expected dollar sales for next period. (Omit the “$” sign in your response.)

(2)

Compute

the number of units expected to be sold next period.

8.

award:

3.20 out of

4.00 points

Exercise 22-17 CVP analysis using composite units L.O. P4

Home

Builders sells windows and doors in the ratio of 8:2 (windows:doors). The

selling price of each window is $106 and of each door is $256. The variable

cost of a window is $65.50 and of a door is $178.00. Fixed costs are

$624,000.

(1)

Determine

the selling price per composite unit. (Omit

the “$” sign in your response.)

(2)

Determine

the variable costs per composite unit (Round

your answer to 2 decimal places. Omit the “$” sign in your

response.)

(3)

Determine

the break-even point in composite units. (Round

your intermediate calculation to 2 decimal places.)

(4)

Determine

the number of units of each product that will be sold at the break-even

point. (Round your intermediate calculation

to 2 decimal places.)

9.

award:

4 out of

4.00 points

Exercise 22-18 CVP analysis using weighted-average contribution margin

L.O. P4

Home

Builders sells windows and doors in the ratio of 8:2 (windows:doors). The

selling price of each window is $114 and of each door is $264. The variable

cost of a window is $69.50 and of a door is $182.00. Fixed costs are

$499,200.

(1)

Determine

the weighted-average contribution margin per unit. (Round your answer to 2 decimal places. Omit the

“$” sign in your response.)

(2)

Determine

the break-even point in units.

(3)

Determine

the number of units of each product that will be sold at the break-even

point. (Round your intermediate calculation

to 2 decimal places.)

10.

award:

4 out of

4.00 points

Exercise 22-19 CVP analysis using composite units L.O. P4

Hubert

Tax Service offers tax and consulting services to individuals and small

businesses. Data for fees and costs of three types of tax returns follow.

Hubert provides services in the ratio of 4:3:3 (easy, moderate, business).

Fixed costs total $30,000 for the tax season.

Type of Return

Fee Charged

Variable Cost

per Return

Easy

(form 1040EZ)

$

70

$

40

Moderate

(form 1040)

145

85

Business

295

110

(1)

Determine

the selling price per composite unit. (Omit

the “$” sign in your response.)

(2)

Determine

the variable costs per composite unit. (Omit

the “$” sign in your response.)

(3)

Determine

the breakeven point in composite units. (Round

your answer to 2 decimal places.)

(4)

Determine

the number of units of each product that will be sold at the break-even

point. (Round your intermediate calculations

to 2 decimal places and final answers to nearest units.)

11.

award:

4 out of

4.00 points

Exercise 22-20 CVP analysis using weighted-average contribution margin

L.O. P4

Hubert

Tax Service offers tax and consulting services to individuals and small

businesses. Data for fees and costs of three types of tax returns follow.

Hubert provides services in the ratio of 4:4:2 (easy, moderate, business).

Fixed costs total $29,000 for the tax season.

Type of Return

Fee Charged

Variable Cost

per Return

Easy

(form 1040EZ)

$

68

$

39

Moderate

(form 1040)

143

84

Business

293

109

(1)

Determine

the weighted-average contribution margin per unit. (Round your answer to 2 decimal places. Omit the

“$” sign in your response.)

(2)

Determine

the break-even point in units. (Round your

answer to 1 decimal place.)

(3)

Determine

the number of units of each product that will be sold at the break-even

point. (Round your intermediate answers to 2

decimal places and final answers to nearest units.)

12.

award:

3 out of

3.00 points

Exercise 22-21 Operating leverage computed and applied L.O. A2

Company

A is a manufacturer with current sales of $3,200,000 and a 50% contribution

margin. Its fixed costs equal $1,140,000. Company B is a consulting firm with

current service revenues of $3,200,000 and a 25% contribution margin. Its

fixed costs equal $340,000.

1.

Compute

the degree of operating leverage (DOL) for each company. (Round your answers to 1 decimal place.)

2.

Identify

which company benefits more from a 20% increase in sales.

eBook LinkView Hint #1

Worksheet

Difficulty: Medium

Exercise 22-21 Operating leverage computed and applied L.O. A2

Learning Objective: 22-A2 Analyze changes in sales using the degree of

operating leverage.

.award:

3 out of

3.00 points Exercise 22-5 Predicting sales and variable costs using contribution

margin L.O. C2Orlando

Company management predicts that it will incur fixed costs of $256,000 and

earn pretax income of $443,600 in the next period. Its expected contribution

margin ratio is 66%.1.Compute

the amount of total dollar sales. (Omit

the “$” sign in your response.)2.Compute

the amount of total variable costs. (Omit the

“$” sign in your response.)2.award:

3 out of

3.00 points Exercise 22-7 Cost behavior estimationscatter diagram and high-low L.O.

P1Felix

& Co. reports the following information about its sales and cost of

sales.PeriodUnits

SoldCost of

SalesPeriodUnits

SoldCost of

Sales1.0 $2,690 6. 2,190 5,690 2.590 3,290 7. 2,590 6,290 3.990 3,890 8. 2,990 6,890 4.1,390 4,490 9. 3,390 7,490 5.1,790 5,090 10. 3,790 8,754 Use the

high-low method to calculate the variable component of the cost of sales. (Round your answer to 2 decimal places. Omit the

“$” sign in your response.)Use the

high-low method to calculate the fixed component of the cost of sales. (Omit the “$” sign in your response.)eBook

LinkView Hint #13.award:

3 out of

3.00 points Exercise 22-9 Contribution margin L.O.A2A pants

maker is designing a new line of pants called the Redbird. The pants will

sell for $330 per pair and cost $260.70 per pair in variable costs to

make.(1)Compute

the contribution margin per pair. (Round your

answer to 2 decimal places. Omit the “$” sign in your response.)(2)Compute

the contribution margin ratio. (Round your

intermediate calculation to 2 decimal places. Omit the “%” sign in

your response.)4.award:

3 out of

3.00 points Exercise 22-12 Income reporting and break-even analysis L.O. C2Apollo

Company manufactures a single product that sells for $310 per unit and whose

total variable costs are $248 per unit. The companys annual fixed costs are

$992,000.(1)Prepare

a contribution margin income statement for Apollo Company at the break-even

point. (Leave no cells blank – be certain to

enter “0” wherever required. Input all amounts as positive values.

Omit the “$” sign in your response.)(2)Assume

if the companys fixed costs increase by $145,000, what amount of sales (in

dollars) is needed to break even? (Omit the

“$” sign in your response.)

eBook LinkView Hint #1WorksheetDifficulty: Medium Exercise 22-12 Income reporting and break-even analysis L.O. C2Learning Objective: 22-C2 Describe several applications of

cost-volume- profit analysis.

5.award:

3 out of

3.00 points Exercise 22-13 Computing sales to achieve target income L.O. C2Apollo

Company manufactures a single product that sells for $280 per unit and whose

total variable costs are $224 per unit. The company targets an annual

after-tax income of $980,000. The company is subject to a 30% income tax

rate. Assume that fixed costs remain at $879,200.(1)Compute

the unit sales to earn the target after-tax net income.(2)Compute

the dollar sales to earn the target after-tax net income. (Omit the “$” sign in your response.)

eBook LinkView Hint #1WorksheetDifficulty: Hard Exercise 22-13 Computing sales to achieve target income L.O. C2Learning Objective: 22-C2 Describe several applications of

cost-volume- profit analysis.

6.award:

3 out of

3.00 points Exercise 22-14 Forecasted income statement L.O. C2Apollo

Company manufactures a single product that sells for $113 per unit and whose

total variable costs are $102 per unit. The companys annual fixed costs are

$626,000. The sales manager predicts that annual sales of the companys

product will soon reach 39,600 units and its price will increase to $196 per

unit. According to the production manager, the variable costs are expected to

increase to $136 per unit but fixed costs will remain $626,000. The income

tax rate is 40%.What

amounts of pretax and after-tax income can the company expect to

earn from these predicted changes? (Omit

the “$” sign in your response.)

eBook LinkView Hint #17.award:

3 out of

3.00 points Exercise 22-15 Predicting unit and dollar sales L.O. C2Greenspan

Company management predicts $520,000 of variable costs, $820,000 of fixed

costs, and a pretax income of $172,000 in the next period. Management also

predicts that the contribution margin per unit will be $62.(1)Compute

the total expected dollar sales for next period. (Omit the “$” sign in your response.)(2)Compute

the number of units expected to be sold next period.8.award:

3.20 out of

4.00 points Exercise 22-17 CVP analysis using composite units L.O. P4Home

Builders sells windows and doors in the ratio of 8:2 (windows:doors). The

selling price of each window is $106 and of each door is $256. The variable

cost of a window is $65.50 and of a door is $178.00. Fixed costs are

$624,000.(1)Determine

the selling price per composite unit. (Omit

the “$” sign in your response.)(2)Determine

the variable costs per composite unit (Round

your answer to 2 decimal places. Omit the “$” sign in your

response.)(3)Determine

the break-even point in composite units. (Round

your intermediate calculation to 2 decimal places.)(4)Determine

the number of units of each product that will be sold at the break-even

point. (Round your intermediate calculation

to 2 decimal places.)9.award:

4 out of

4.00 points Exercise 22-18 CVP analysis using weighted-average contribution margin

L.O. P4Home

Builders sells windows and doors in the ratio of 8:2 (windows:doors). The

selling price of each window is $114 and of each door is $264. The variable

cost of a window is $69.50 and of a door is $182.00. Fixed costs are

$499,200.(1)Determine

the weighted-average contribution margin per unit. (Round your answer to 2 decimal places. Omit the

“$” sign in your response.)(2)Determine

the break-even point in units.(3)Determine

the number of units of each product that will be sold at the break-even

point. (Round your intermediate calculation

to 2 decimal places.)

10.award:

4 out of

4.00 points Exercise 22-19 CVP analysis using composite units L.O. P4Hubert

Tax Service offers tax and consulting services to individuals and small

businesses. Data for fees and costs of three types of tax returns follow.

Hubert provides services in the ratio of 4:3:3 (easy, moderate, business).

Fixed costs total $30,000 for the tax season.Type of ReturnFee ChargedVariable Cost

per Return Easy

(form 1040EZ) $70 $40 Moderate

(form 1040) 145 85 Business 295 110 (1)Determine

the selling price per composite unit. (Omit

the “$” sign in your response.)(2)Determine

the variable costs per composite unit. (Omit

the “$” sign in your response.)(3)Determine

the breakeven point in composite units. (Round

your answer to 2 decimal places.)(4)Determine

the number of units of each product that will be sold at the break-even

point. (Round your intermediate calculations

to 2 decimal places and final answers to nearest units.)11.award:

4 out of

4.00 points Exercise 22-20 CVP analysis using weighted-average contribution margin

L.O. P4Hubert

Tax Service offers tax and consulting services to individuals and small

businesses. Data for fees and costs of three types of tax returns follow.

Hubert provides services in the ratio of 4:4:2 (easy, moderate, business).

Fixed costs total $29,000 for the tax season.Type of ReturnFee ChargedVariable Cost

per Return Easy

(form 1040EZ) $68 $39 Moderate

(form 1040) 143 84 Business 293 109 (1)Determine

the weighted-average contribution margin per unit. (Round your answer to 2 decimal places. Omit the

“$” sign in your response.)(2)Determine

the break-even point in units. (Round your

answer to 1 decimal place.)(3)Determine

the number of units of each product that will be sold at the break-even

point. (Round your intermediate answers to 2

decimal places and final answers to nearest units.)12.award:

3 out of

3.00 points Exercise 22-21 Operating leverage computed and applied L.O. A2Company

A is a manufacturer with current sales of $3,200,000 and a 50% contribution

margin. Its fixed costs equal $1,140,000. Company B is a consulting firm with

current service revenues of $3,200,000 and a 25% contribution margin. Its

fixed costs equal $340,000. 1.Compute

the degree of operating leverage (DOL) for each company. (Round your answers to 1 decimal place.) 2.Identify

which company benefits more from a 20% increase in sales. eBook LinkView Hint #1WorksheetDifficulty: Medium Exercise 22-21 Operating leverage computed and applied L.O. A2Learning Objective: 22-A2 Analyze changes in sales using the degree of

operating leverage.