ACC 561 Final Exam

QUESTION 4: Kai decides to add color and keep his price the same. This will increase variable costs by $0.40 per issue. What will be the new unit volume (copies per issue) required to maintain $500 profits and cover the increased fixed and variable costs?

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In our second assumption, instead of using the cost of goods per cases in 1986, we try to use the percentage it counts in the total expenses which is 50.4% and to find the sales needed to break-even. The detail of the calculation is shown in the answer for questions d. The result is that 95,635, a little bit higher than the estimated sales of 90,000.

Break-even Dollar Volume = Total Fixed Costs / Contribution Margin = $525,000 / 0.7111 = $738,282.40

| |A. |[pic]|provide feedback by comparing results with plans and by highlighting deviations from plans |

If Marlene Herbert were to discontinue place mats, he would miss $270,000 that will go toward Mendel paper company fixed cost. The company currently has a plant overhead that is estimated at $420,000 for the quarter. In addition to the fixed plant overhead, the plant incurs fixed selling and administrative expenses per quarter of $118,000. This draws the company to a total fixed cost of $538,000. If Marlene Herbert were to discontinue the second highest contributor to the fixed cost, he would need to increase the volume of computer paper and lower material cost to help pull the contribution margin of the lowest product up to help support the lost of a whole product line.

4.    Evergreen Fertilizer Company produces fertilizer. The company’s fixed monthly cost is $25,000, and its variable cost per pound of fertilizer is $0.15. Evergreen sells the fertilizer for $0.40 per pound. Determine the monthly break-even volume for the

In the problem, the ASU bookstore is selling t-shirts for $25. The setup fee is $550 and it cost $850 to produce 100 shirts. The questions I am solving for are: How much the bookstore is paying for each shirt and should the bookstore produce 500 t-shirts? I approached the problem by using my notes as a guide. I decided to use the cost function, profit function, revenue function, and break even analysis formulas to solve this problem. The key elements I pulled from the text are these equations:

Question 4: Calculate each of the three products’ break even points using the data. Why is the sum of these three volumes not equal to the 1,100,000 unit’s aggregate break-even volume?

Which terms would make the following sentence true? Manufacturing companies that benefit the most from activity-based costing are those where overhead costs are a _________ percentage of total product cost and where there is ___________ diversity among the various products that they produce.

Gina Fox has started her own company, Foxy Shirts, which manufactures imprinted shirts for special occasions. Since she has just begun this operation, she rents the equipment from a local printing shop when necessary. The cost of using the equipment is $350. The materials used in one shirt cost $8, and Gina can sell these for $15 each. (a) If Gina sells 20 shirts, what will her total revenue be? What will her total variable cost be? (b) How many shirts must Gina sell to break even? What is the total revenue for this?

2. Adams Company sells a single product. The product sells for $100 per unit. The company’s variable

Question 1 (16 points) Carol Inc is considering the following three prices to charge customers for each of the candy packets they produce: i) $2.20 ii) $2.00 iii) $1.70 The relevant data for decision-making is below: Fixed Costs = $1200 Variable Costs = $0.50 per unit Calculate the following: a) The Breakeven Point for each price level b) Using price of $2.20 what would be the new breakeven point if (1) fixed costs decreased to $1000 all else remaining the same, (2) Variable costs increased to $0.75 all else remaining the same. Draw a graph to represent scenario (1) and (2) comparing with the original data for price of $2.20. [Total of two graphs] Question 2 (12 points) Greater Manufacturing is evaluating two different operating

Question : 3 The Chakrapani Ltd 's Cost behaviour is as follows: Production range in units 0- 20000 20001 - 65000 65001 - 90000 90001 - 100000 Fixed cost Rs. 160000 Rs. 190000 Rs. 210000 Rs. 250000

                        Missouri Company has a current production capacity level of 200,000 units per month. At this level of production, variable costs are $0.50 per unit and fixed costs are $0.50 per unit.  Current monthly sales are 173,000 units.  Gates Company has contacted Missouri Company about purchasing 20,000 units at $1.00 each.  Current sales would not be affected by the special order and no additional fixed costs would be incurred on the special order.  Missouri Company 's change in profits if the order is accepted will be a  _____: