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ACCT 221 Ch 12 Problems

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Question;Problem 3-6Calculate the missing amounts for each of the following firms: (Negative amount shouldbe indicated by a minus sign. Do not round intermediate calculations. Round answersto 2 decimal places.UnitsSoldFirmAFirmBFirmCFirmD5,600VariableCostsPer UnitSellingPrice$ 12.00ContributionMargin$16,800$ 25,2003.2066,552$ 20,300$43,18028,70055.2514,160OperatingIncome (Loss)84,50022.207.30FixedCosts(13,500)73,2504. Meyers Corp. has annual revenues of $450,000, an average contribution margin ratio of35%, and fixed expenses of $175,000.Required:(a Management is considering adding a new product to the company's product line. The new) item will have $9.75 of variable costs per unit. Calculate the selling price that will berequired if this product is not to affect the average contribution margin ratio. (Omit the"$" sign in your response.)Selling price$(b If the new product adds an additional $37,800 to Meyers's fixed expenses, how many) units of the new product must be sold at the price calculated in requirement a to breakeven on the new product? (Do not round your intermediate calculations.)Break evenunits(c If 15,000 units of the new product could be sold at a price of $16.00 per unit, and the) company's other business did not change, calculate Meyers's total operating income andaverage contribution margin ratio. (Do not round your intermediate calculations.Round your answers to 2 decimal places. Omit the "$" and "%" signs in yourresponse.)Operating incomeAverage contributionmargin ratio$%5.The management of Rocko's Pizzeria is considering a special promotion for the last twoweeks of October, which is normally a relatively low-demand period. The special promotionwould involve selling two medium pizzas for the price of one, plus 1 cent. The mediumpizza normally sells for $12.99 and has variable expenses of $4.50. Expected sales volumewithout the special promotion is 600 medium pizzas per week.Required:(a Calculate the total contribution margin generated by the normal volume of medium pizzas) in a week. (Do not round your intermediate calculations. Omit the "$" sign in yourresponse.)Contribution margin$(b Calculate the total number of medium pizzas that would have to be sold during the 1-cent) sale to generate the same amount of contribution margin that results from the normalvolume. (Do not round your intermediate calculations.)Number of pizzas6.Shown here is an income statement in the traditional format for a firm with a sales volumeof 20,000 units:RevenuesCost of goodssold ($16,000 +$3.20/unit)$Gross profitOperatingexpenses:Selling($4,500 +$1.40/unit)Administration($7,500 +$1.00/unit)$Operating income$160,00080,00080,00032,50027,50020,000Requirement 1:Prepare an income statement in the contribution margin format. (Omit the "$" sign in yourresponse.)$Variable expenses:$Total variable expensesContribution marginFixed expenses:$$Total fixed expenses$Requirement 2:Calculate the contribution margin per unit and the contribution margin ratio. (Round youranswers to 1 decimal place. Omit the "$" and "%" signs in your response.)Contribution margin perunitContribution margin ratio$%Requirement 3:(a Calculate the firm's operating income (or loss) if the volume changed from 20,000 units) to 25,000 units. (Input the amount as positive value. Omit the "$" sign in yourresponse.)$(b Calculate the firm's operating income (or loss) if the volume changed from 20,000 units) to 11,000 units. (Input the amount as positive value. Omit the "$" sign in yourresponse.)$Requirement 4:Refer to your answer to requirement 1 when total revenues were $160,000.(a Calculate the firm's operating income (or loss) if unit selling price and variable expenses) do not change, and total revenues increase by $18,000. (Input the amount as positivevalue. Omit the "$" sign in your response.)$(b Calculate the firm's operating income (or loss) if unit selling price and variable expenses) do not change, and total revenues decrease by $12,000. (Input the amount as positivevalue. Omit the "$" sign in your response.)Problem E12-4The following information provides the amount of cost incurred in May for the cost itemsindicated. During May 16,000 units of the firm's single product were manufactured.RawmaterialsFactorydepreciation expenseDirectlaborProductionsupervisor'ssalaryComputerrentalexpenseMaintenance suppliesused$83,20081,000198,40012,2008,4001,600Requirement 1:How much cost would you expect to be incurred for each of these items during June when19,200 units of the product are planned for production? (Do not round the intermediatecalculations. Omit the "$" sign in your response.)Raw materialsFactory depreciationexpenseDirect laborProduction supervisor'ssalaryComputer rental expenseMaintenance supplies used$Total cost$Requirement 2:(a Calculate the average total cost per unit for the 16,000 units manufactured in May.) (Round your answer to 2 decimal places. Omit the "$" sign in your response.)Average cost per unit$(b It is meaningful to use the average total cost figure in Requirement 2: (a) to predict the) cost in subsequent months

 

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