Fill in the missing amounts in each of the eight case situations below. Each cas
ID: 2492090 • Letter: F
Question
Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution-format income statement for each case, enter the known data, and then compute the missing items.)
a. Assume that only one product is being sold in each of the following four case situations:
CASE 1 2 3 4
UNITS SOLD 6900 29000 NIL 7000
SALES 400,200 928,000 NIL 441,000
VARIABLE EXP 220,800 NIL 754,000 NIL
CM/UNIT NIL 22 6 NIL
FIXED EXP 95,000 290,000 NIL 85,000
OPERATING INCOME NIL 62,000 92,000 129,000
------------------------------------------------------------------------------------------------------------------------------------------------------------
Assume that more than one product is being sold in each of the following four case situations:
CASE # 1 2 3 4
UNITS SOLD 490,000 185,000 NIL 390,000
SALES NIL 120,250 NIL 81,900
AV CM% 40% NIL 80% NIL
FIXED EXP NIL 30,000 590,000 NIL
OP INCOME 69,000 NIL 74,000 (35,000)
b.
Assume that more than one product is being sold in each of the following four case situations:
CASE # 1 2 3 4
UNITS SOLD 490,000 185,000 NIL 390,000
SALES NIL 120,250 NIL 81,900
AV CM% 40% NIL 80% NIL
FIXED EXP NIL 30,000 590,000 NIL
OP INCOME 69,000 NIL 74,000 (35,000)
Explanation / Answer
Requirement a:
Case
1
2
3
4
Units Sold
6900
29000
7000
Sales
400200
928000
441000
Variable Expense
220800
290000
754000
227000
CM / unit
26
22
6
30.57
Fixed Expense
95000
290000
85000
Operating Income
84400
62000
92000
129000
Case 1:
Contribution Margin = Sales – Variable Expense
= 400200 – 220800
= 179400
CM / unit = Contribution Margin / Units Sold
= 179400 / 6900
= 26
Operating Income = Contribution Margin – Fixed Expense
= 179400 – 95000
= 84400
Case 2:
Contribution Margin = CM / unit * Units Sold
= 22 * 29000
= 638000
Variable Expense = Sales – Contribution
= 928000 – 638000
= 290000
Case 3: Some information is missing to answer
Case 4:
Contribution Margin = Operating Income + Fixed Expense
= 129000 + 85000
= 214000
CM / unit = Contribution Margin / Units Sold
= 214000 / 7000
= 30.57
Variable Expense = Sales – Contribution Margin
= 441000 – 214000
= 227000
Requirement b:
Case
1
2
3
4
Units Sold
490000
185000
390000
Sales
120250
81900
AV CM %
40%
80%
Fixed Expense
30000
590000
Operating Income
69000
74000
(35000)
Note:
Complete data is not provided to answer the part b
Case
1
2
3
4
Units Sold
6900
29000
7000
Sales
400200
928000
441000
Variable Expense
220800
290000
754000
227000
CM / unit
26
22
6
30.57
Fixed Expense
95000
290000
85000
Operating Income
84400
62000
92000
129000
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