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 estimation—scatter 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 company’s 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 company’s 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 company’s annual fixed costs are
$626,000. The sales manager predicts that annual sales of the company’s
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.