10.00 points Fill in the missing amounts in each of the eight case situations be

Question

10.00 points 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 a. Assume that only one product is being sold in each of the four following case situations: Case #1 Case #2 Case #3 Case #4 8,700 19,500 4,700 Unit sold Sales Variable expenses Fixed expenses 295,800 286,000 $ 159,800 113,100 273,000 93,000 179,000 76,000 Net operating income (loss) 89,700(23,000) 113,000 (10,200) Contribution margin per unit S 621 S 12 S 10 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 $ 290,000 $ 442,000 191,000 116,510 65,000 Variable expenses Fixed expenses Net operating income (loss) Average contribution margin ratio (percent) 75,400 468,000 $ 75,480 44% $ 70,080(2,400) 76% 7 FS

Explanation / Answer

Q1a: CASE1 CASE2 CASE3 CASE4 Units Sold 8700 13000 19500 4700 sales 295800 286000 468000 159800 Variable expense 113100 130000 273000 94000 Fixed expense 93000 179000 82000 76000 Net operating income /(loss) 89700 -23000 113000 -10200 Contribution margin per unit 62 12 10 14 Note: case-2 Contribution: Fixed cost- net loss= 179000-23000 = $156000 Contribution perr unit: $ 12 Number of units: 156000 /12 = 13,000 units Selling price per unit: Total sales / sales unitts = 286,000 /13000 = $22 per unit Variable cost per unit = 22 - 12 =10 per unit Total variable cocst:13000 units *10 == $130,000 Case-3 Variable cost: 273000 Number of units: 19500 units Variable ccost per unit: 14 per unit Selling price: 14+10= 24 per unit Sales: 19500 units @$24= $468,000 Fixed cost: sales - variable cost - net income =468000-273000-113000 = 82000 Ccase-3 Contribution: fixed cost- net loss= 76000 -10200 = 65800 Contribution per unit: 65800 /4700 = 14 per unit Selling price per unt : 159800/4700 = 34 per unitt Variable cost per unit: 34- 14 = 20 units Vvariable cost = 4700*20 = 94000 Req 1-b: CASE1 CASE2 CASE3 CASE4 sales 442000 191000 708000 290000 Variable expense 247520 116510 169920 75400 Fixed expense 119000 65000 468000 217000 Net operating income /(loss) 75480 9490 70080 -2400 Average CM ratio 44% 39% 76% 74% Case-1 Cm ratio =44% Total contribution =sales*Cm ratio = 442000*44% = $ 194,480 Variable cost = sales -contnribution= 442000 -194480 = $ 247520 Fixed expense = Contribution - net income = 194480-75480 = 119000 Case-2 Variable cost ratio = 116510/ 191000*100 = 61% Contribution margin ratio =100-61 =39% Net income = contribution-fixed expense = 191000*39% -65000 = 9490 Case-3 Contribution = 468000+70080 = $ 538080 Cm ratio = 76% Sales = 538080/76% = $708000 Variable cost = sales -contribution = 708000 -538080 = 169920 case-4 Vc ratio = 75400/290000*100 = 26% Cm ratio = 100-26 = 74% Contribution= 290000*74% =214600 Fixed cost = contribution+net loss =214600+2400 =217000

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