Question

1. Kirkland Company provided the following information for the month ended July 31, 2015, based on selling 1,000 units of its bottled water.

Sales Revenue	$800,000
Variable Costs	$300,000
Fixed Costs	$100,000

What is Kirkland's margin of safety?

2. Chutes Company sells slides for $400 each. If their fixed costs total $300,000, how many slides must Chutes sell to breakeven if variable costs are $100 each?

3. Chutes Company sells slides for $400 each. If their fixed costs total $300,000, how much in sales revenue must Chutes achieve to breakeven if variable costs are $100 each?

4. Chutes Company sells slides for $400 each. If their fixed costs total $300,000, how many slides must Chutes sell to reach a target net income of $800,000 if variable costs are $100 each?

5. Chutes Company sells slides for $400 each. If their fixed costs total $300,000, how much in sales revenue must Chutes achieve to reach a target net income of $800,00 if variable costs are $100 each?

6. Chutes Company sells slides for $400 each. If their fixed costs total $300,000, what is the margin of safety ratio if chutes expects to achieve a net income of $800,000 when variable cost are $100 each?

7. A company sells a product which has a unit sales price of $10, unit variable cost of $2 and total fixed costs of $135,000. How many units must the company must sell to break even?

8. For Clifford Company, sales are $2,000,000 for the one product they sell. Fixed expenses are $700,000 and the contribution margin ratio is 40%. What are required sales in dollars to earn a target net income of $400,000?

9. Madden Company produces dongles for computers, which it sells for $20 each. Each dongle cost $4 of variable costs to make. During June, 4,000 dongles were sold. Fixed costs for May were $5 per unit for a total of $20,000 for the month. How much is the contribution margin ratio?

10. Based on the chart below, classify each of the costs ar variable, fixed or mixed. State how you came to your conclusion.

Cost	Month	Cost	Units Produced
Drilling Costs	January February	$80,000 $120,000	40,000 60,000
Smoothing Costs	January February	$100,000 $100,000	70,000 60,000
Mining Costs	January February	$159,000 $195,000	43,000 55,000

a. Drilling Costs

b. Smoothing Costs

c. Mining Costs

Answer 1

Answer to Question 1 and 2:

Answer to Question 3 and 4: