You have information about 4 different companies below in the table. The variable and fixed costs are expressed as the percentage of revenue based on the current sales. The companies are otherwise very similar. Which of these companies is probably have the highest degree of operating leverage? A B CD Variable cost (%) 35% 27% 50% 80% Fixed cost 50% 60% 30% 5% O Project A O Project D O Project C O Project B
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- Refer to Cornerstone Exercise 15.3. Choctaw Company provides the following additional information so that total productivity can be valued: Required: 1. Calculate the cost of inputs in 20x2, assuming no productivity change from 20x1 to 20x2. 2. Calculate the actual cost of inputs for 20x2. What is the net value of the productivity changes? How much profit change is attributable to each inputs productivity change? 3. What if a manager wants to know how much of the total profit change from 20x1 to 20x2 is attributable to price recovery? Calculate the price-recovery component, and comment on its meaning.Variable costing income statement and contribution margin analysis for a service company The actual and planned data for Underwater University for the Fall term were as follows: Actual Planned Enrollment 4,500 4,125 Tuition per credit hour 120 135 Credit hours 60,450 43,200 Registration, records, and marketing cost per enrolled student 275 275 Instructional costs per credit hour 64 60 Depreciation on classrooms and equipment 825,600 825,600 Registration, records, and marketing costs vary by the number of enrolled .students, while instructional costs vary by the number of credit hours. Depreciation is a fixed cost. A. Prepare a variable costing income statement showing the contribution margin and income from operations for the Fall term. B. Prepare a contribution margin analysis report comparing planned with actual performance for the Fall term.(Please answer question 3) Management believes it can sell a new product for $8.50. The fixed costs of production are estimated to be $6,000, and the variable costs are $3.20 a unit. Complete the following table at the given levels of output and the relationships between quantity and fixed costs, quantity and variable costs, and quantity and total costs. Quantity Total Revenue Variable Costs Fixed Costs Total Costs Profits (Loss) 0 500 1,000 1,500 2,000 2,500 3,000 2. Determine the break-even level using the above table and use the following Equation to confirm the break-even level of output. PQB = FC + VQB PQB - VQB = FC QB (P-V) = FC QB = FC P-V 3. What would happen to the total revenue schedule, the total cost schedule, and the break-even level of output if management…
- Question 2: Preparation of break‐even chart with step fixed costs:Tordo GmbH manufactures various products and uses CVP analysis to establishthe minimum level of production to ensure profitability.Fixed costs of 50 000€ have been allocated to a specific product, but areexpected to increase to 100 000€ once production exceeds 30 000 units.Variable costs per unit are stable at 5€ per unit over all levels of activity.Revenue from this product will 7,50€ per unitRequired:a. Formulate the equations for the total cost (or calculate the total cost) at:i. Less than or equal to 30 000 unitsii. More than 30 000 units (tip: select 30 001 units to illustrate)b. Prepare a break-even chart and clearly identify the break-even point orpoints (this can be hand drawn and not scale – indicative) c. Briefly discuss the implications of the results from your graph in (b) withregard to Tordo’s production plansQUESTION 9 QRC Company is trying to decide which one of two alternatives it will accept. The costs and revenues associated with each alternative are listed below: Alternative A Alternative B Projected revenue $ 62,500 $ 75,000 Unit-level costs 12,500 18,000 Batch-level costs 6,250 12,000 Product-level costs 7,500 8,500 Facility-level costs 5,000 6,250 What is the differential revenue for this decision? $62,500 $25,000 $75,000 $12,500#34 A calculation used in CVP analysis is the break-even point. At this point, total revenue equals total costs. Beyond the break-even point, operating income will increase by the Group of answer choices A. variable cost per unit for each additional unit. B. selling price per unit for each additional unit. C. contribution margin per unit for each additional unit. D. contribution margin per unit for each additional unit.
- 1. Question 5 Cost Volume Profit Total Company produces one type of machine with the following costs and revenues for the year: Total revenues $4,200,000 Total fixed costs $1,400,000 Total variable costs $2,800,000 Total units produced and sold 700,000 Required: (a) What is the selling price per unit? (b) What is the variable cost per unit? (c) What is the contribution margin per unit? (d) What is the breakeven point in units? (e) How many units must be sold to make an operating profit of $1,000,000 for the year? Required:1. Question 5 Cost Volume Profit Total Company produces one type of machine with the following costs and revenues for the year: Total revenues $4,200,000 Total fixed costs $1,400,000 Total variable costs $2,800,000 Total units produced and sold 700,000 Required: (a) What is the selling price per unit? (b) What is the variable cost per unit? (c) What is the contribution margin per unit? (d) What is the breakeven point in units? (e) How many units must be sold to make an operating profit of $1,000,000 for the year? Required: 1 calculate breakeven pont ? 2.calculate quantity that will be produced an operating profit of $100000 3.calculate the quantity of the would produce operating profit 10% of sales dollars 4.calculate breakeven quanity if sales increase by 20 % 5.calculate operating margin if 50000 units are sold .Question 5 Company E has the following information on its management books: Total Fixed Costs: $24,000 Sales Volume Forecast: 4,000 units Variable Costs per Unit: $2 What price must Company E charge to break even?
- Question 14 Lees Corp. is deciding whether to keep or drop a small segment of its business. Key information regarding the segment include: Contribution margin: 30,000 Avoidable fixed costs: 35,000 Unavoidable fixed costs: 25,000 Given the information above, Lees should Group of answer choices Keep the segment because the contribution margin exceeds unavoidable fixed costs. Drop the segment because avoidable fixed costs exceed unavoidable fixed costs. Drop the segment because the contribution margin is less than avoidable fixed costs. Keep the segment because the contribution margin exceeds than total fixed costs.Use the following information for the next 2 questions (8 & 9). Division X produces and sells a product to external and internal customers. Per-unit information about its operations include: Selling price per unit to external customers $250 Variable manufacturing costs per unit 115 Fixed manufacturing overhead costs per unit 70 8. If X is operating at capacity and has unlimited external customer demand, what should be the minimum transfer price? 9. If X has sufficient excess capacity to meet internal demand, what should be the minimum transfer price?Question 2: Preparation of break‐even chart with step fixed costs:Tordo GmbH manufactures various products and uses CVP analysis to establish the minimum level of production to ensure profitability.Fixed costs of 50 000€ have been allocated to a specific product, but areexpected to increase to 100 000€ once production exceeds 30 000 units.Variable costs per unit are stable at 5€ per unit over all levels of activity.Revenue from this product will 7,50€ per unit
