Question

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Thanks

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Evan's Electronics Boutique sells a digital camera. The following information was reported for the digital camera last month:

Sales	$ 17,600
Variable expenses	9,680
Contribution margin	7,920
Fixed expenses	3,600
Net operating income	$ 4,320

Evan's margin of safety in dollars and percentage are closest to:

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Farris Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price	$148
Units in beginning inventory	0
Units produced	9,400
Units sold	9,000
Units in ending inventory	400

Variable costs per unit:
Direct materials	$ 27
Direct labor	$ 69
Variable manufacturing overhead	$ 15
Variable selling and administrative expense	$ 19
Fixed costs:
Fixed manufacturing overhead	$141,000
Fixed selling and administrative expense	$ 9,700

What is the net operating income for the month under absorption costing?

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Corbel Corporation has two divisions: Division A and Division B. Last month, the company reported a contribution margin of $40,200 for Division A. Division B had a contribution margin ratio of 45% and its sales were $204,000. Net operating income for the company was $31,400 and traceable fixed expenses were $52,800. Corbel Corporation's common fixed expenses were:

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At an activity level of 8,400 units in a month, Braughton Corporation’s total variable maintenance and repair cost is $697,284 and its total fixed maintenance and repair cost is $464,100. What would be the total maintenance and repair cost, both fixed and variable, at an activity level of 8,500 units in a month? Assume that this level of activity is within the relevant range

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At an activity level of 9,100 machine-hours in a month, Falks Corporation’s total variable production engineering cost is $803,530 and its total fixed production engineering cost is $161,280. What would be the total production engineering cost per machine-hour, both fixed and variable, at an activity level of 9,600 machine-hours in a month? Assume that this level of activity is within the relevant range.

Answer 1

1)p/v ratio = contribution / sale =7920/17600 =45%

BEP sale = fixed cost / pv ratio

bep = 3600/45%= $8000

Acutal sale - BEP sale = margin of safty

17600-8000= $9600

margin of saftey ratio = MOS/ sales *100 = 9600/17600*100 = 54.54%

2)

Units produced	9400
Materials	27	253800
Labor	69	648600
Variable o/h	15	141000
Fixed o/h	15*	141000
Total	126	1184400

* 141000/9400 = 15

3)

Contribution margin of Division A = 40,200

+Contribution margin of Division B = 204000*45% = 91800

Total = 132000

less-Fixed expenses - treaceable = 52800

less: Net operating income = 31400

Non traceable Fixed expenses = 47800

(

4) At an activity level of 8,400 units in a month, Braughton Corporation’s total variable maintenance and repair cost is $697,284 and its total fixed maintenance and repair cost is $464,100. What would be the total maintenance and repair cost, both fixed and variable, at an activity level of 8,500 units in a month? Assume that this level of activity is within the relevant range

Level of Activity
	8400
	Per Unit	Total
Variable Cost (697284/8400)	$83.01	$6,97,284.00
Fixed Cost		$4,64,100.00
Total		$11,61,384.00

	Level of Activity
	8500
	Per Unit	Total
Variable Cost (8500*83.01)	$83.01	$7,05,585.00
Fixed Cost (Remains the same as the level of activuty is within the range)		$4,64,100.00
Total		$11,69,685.00

5) At an activity level of 9,100 machine-hours in a month, Falks Corporation’s total variable production engineering cost is $803,530 and its total fixed production engineering cost is $161,280. What would be the total production engineering cost per machine-hour, both fixed and variable, at an activity level of 9,600 machine-hours in a month? Assume that this level of activity is within the relevant range

answer -

Variable cost per unit= $803530/9100= $88.30

Fixed cost per unit= $161280/9600= $16.80

Total production engineering cost per unit= Variable cost per unit+Fixed cost per unit

= $88.30+16.80= $105.10 so the cost per machine-hour

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