business 182 1

Given the following cost and activity observations for Smithson Company’s utilities, use the high-low method to calculate Smithson’s fixed costs per month. Round your final answer to the nearest dollar. Do not round interim calculations.

	Cost	Machine Hours
January	$26,700	10,100
February	37,100	18,300
March	28,600	12,500
April	30,700	15,300

$23,613

$11,112

$44,448

$13,890

If sales are $816,000, variable costs are 68% of sales, and operating income is $210,000, what is the contribution margin ratio?

32%

64%

68%

36%

Bluegill Company sells 14,900 units at $280 per unit. Fixed costs are $208,600 and income from operations is $2,711,800. Determine the following: Round the contribution margin ratio to two decimal places.

a. Variable cost per unit	$
b. Unit contribution margin	$	per unit
c. Contribution margin ratio		%

Break-Even Point

Elrod Inc. sells a product for $75 per unit. The variable cost is $45 per unit, while fixed costs are $48,000.

Determine (a) the break-even point in sales units and (b) the break-even point if the selling price were increased to $95 per unit.

a. Break-even point in sales units	units
b. Break-even point if the selling price were increased to $95 per unit	units

Target Profit

Versa Inc. sells a product for $100 per unit. The variable cost is $75 per unit, and fixed costs are $45,000.

Determine (a) the break-even point in sales units and (b) the break-even point in sales units if the company desires a target profit of $25,000.

a. Break-even point in sales units	units
b. Break-even point in sales units if the company desires a target profit of $25,000	units

 

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