Fill in the missing amounts in each of the eight case situations below. Each cas

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.) Required Assume that only one product is being sold in each of the four following case situations Case #1 Case #2 Case #3 Case #4 20,800 5,400 $140,400 9,200 Unit sold Sales Variable expenses Fixed expenses Net operating income (loss) Contribution margin per unit $248,400 340,000 156,400 95,000 249,600 163,000 88,000 S (13,400) 135,800 $(34,000) 11 $ b. Assume that more than one product is being sold in each of the four following case situations Case #1 Case #2 Case #3 Case #4 451,000 209,000 144,210 67,000 $ 307,000 Sales Variable expenses Fixed expenses Net operating income (loss) Average contribution margin ratio (percent) 89,030 468,000 86,400 $(4,030) 64,400 40% 80%

Explanation / Answer

a) Particulars Case 1 Case 2 Case 3 Case 4 Units sold 9200 13600 20800 5400 Sales $248400 340000 478400 140400 Variable expenses 156400 190400 249600 86400 Fixed Expenses 95000 163000 93000 88000 Net operating income(loss) -3000 -13400 135800 -34000 Contribution margin per unit 10 11 11 10 Working: Case 1 Net operating income= sales- variable expenses- fixed expenses                                             =248400-156400-95000=(3000) Contribution margin per unit= (248400-156400)/9200= $10 Case 2 variable expenses= 340000-163000+13400= $190400 Units sold= (340000-190400)/11= 13600 units Case 3: Contribution= 20800*11= $228800 Sales= 249600+228800= $478400 Fixed expenses= 478400-248600-135800= $93000 Case 4: variable expenses= 140400-88000+34000= $86400 Contribution margin per unit=(140400-86400)/5400= $10 b) Particulars Case 1 Case 2 Case 3 Case 4 Sales 451000 209000 693000 307000 Variable expenses 270600 144210 138600 89030 Fixed Expenses 116000 67000 468000 222000 Net operating income(loss) 64400 -2210 86400 -4030 Average Contribution margin ratio(percent) 40% 31% 80% 71% Working: Case 1 Variable cost ratio= 100-40=60% Variable expenses= 451000*0.60=$270600 Fixed expenses= 451000-270600-64400= $116000 Case 2 Net operating income= 209000-144210-67000= (2210) Average contribution margin ratio= (209000-144210)/209000*100= 31% Case 3: Contribution= 468000+86400= $554400 Sales= 554400/0.80= $693000 Variable expenses= 693000-468000-86400= $138600 Case 4: Fixed expenses= 307000-89030+4030= $222000 Average contribution margin ratio= (307000-89030)/307000*100= 71%

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