(1,226 value: 10.00 points Fill in the missing amounts in each of the eight case
ID: 342052 • Letter: #
Question
(1,226 value: 10.00 points Fill in the missing amounts in each of the eight case situations below. Each case is 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) of the Required Assume that only one product is being sold in each of the four following case situations: Case #1 Case #2 Case #3 8,600 20,700 Unit sold Sales Variable expenses Fixed expenses Net operating income (loss) Contribution margin per unit 5,000 S 170,000 75,000 87,000 14,800 137,700$ 8,000 $ 258,000$ 343,200 137,600 81,000 35 269,100 170,000 $ 14 $ b. Assume that more than one product is being sold in each of the four following case situations: Case #3 Case #4 Case #2 Case #1 $ 307,000 445,000 S 206,000Explanation / Answer
Answer a.
Case #1:
Net Operating Income (loss) = Sales - Variable Expenses - Fixed Expenses
Net Operating Income (loss) = $258,000 - $137,600 - $81,000
Net Operating Income (loss) = $39,400
Contribution per unit = (Sales - Variable Expenses) / Unit sold
Contribution per unit = ($258,000 - $137,600) / 8,600
Contribution per unit = $14.00
Case #2:
Net Operating Income (loss) = Sales - Variable Expenses - Fixed Expenses
$14,800 = $343,200 - Variable Expenses - $170,000
Variable Expenses = $158,400
Contribution per unit = (Sales - Variable Expenses) / Unit sold
$14.00 = ($343,200 - $158,400) / Unit sold
Unit sold = 13,200
Case #3:
Contribution per unit = (Sales - Variable Expenses) / Unit sold
$11.00 = (Sales - $269,100) / 20,700
Sales = $496,800
Net Operating Income (loss) = Sales - Variable Expenses - Fixed Expenses
$137,700 = $496,800 - $269,100 - Fixed Expenses
Fixed Expenses = $90,000
Case #4:
Net Operating Income (loss) = Sales - Variable Expenses - Fixed Expenses
$8,000 = $170,000 - Variable Expenses - $87,000
Variable Expenses = $75,000
Contribution per unit = (Sales - Variable Expenses) / Unit sold
Contribution per unit = ($170,000 - $75,000) / 5,000
Contribution per unit = $19.00
Answer b.
Case #1:
Average Contribution Margin Ratio = (Sales - Variable Expenses) / Sales
41% = ($445,000 - Variable Expenses) / $445,000
Variable Expenses = $262,550
Net Operating Income (loss) = Sales - Variable Expenses - Fixed Expenses
$70,450 = $445,000 - $262,550 - Fixed Expenses
Fixed Expenses = $112,000
Case #2:
Average Contribution Margin Ratio = (Sales - Variable Expenses) / Sales
Average Contribution Margin Ratio = ($206,000 - $127,720) / $206,000
Average Contribution Margin Ratio = 38%
Net Operating Income (loss) = Sales - Variable Expenses - Fixed Expenses
Net Operating Income (loss) = $206,000 - $127,720 - $64,000
Net Operating Income (loss) = $14,280
Case #3:
Average Contribution Margin Ratio = (Sales - Variable Expenses) / Sales
76% = (Sales - Variable Expenses) / Sales
0.76 * Sales = Sales - Variable Expenses
Net Operating Income (loss) = Sales - Variable Expenses - Fixed Expenses
$59,680 = Sales - Variable Expenses - $467,000
$526,680 = 0.76 * Sales
Sales = $693,000
0.76 * Sales = Sales - Variable Expenses
0.76 * $693,000 = $693,000 - Variable Expenses
Variable Expenses = $166,320
Case #4:
Average Contribution Margin Ratio = (Sales - Variable Expenses) / Sales
Average Contribution Margin Ratio = ($307,000 - $82,890) / $307,000
Average Contribution Margin Ratio = 73%
Net Operating Income (loss) = Sales - Variable Expenses - Fixed Expenses
-$4,890 = $307,000 - $82,890 - Fixed Expenses
Fixed Expenses = $229,000
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