Question

Exercise 5-11

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:

b. Assume that more than one product is being sold in each of the four following case situations:

(For all requirements, Loss amounts should be indicated by a minus sign.)

Required A
	Case #1 Case #2 Case #3 Case #4 Unit sold 8,400 19,100 5,400 Sales $268,800 $282,000 $140,400 Variable expenses 142,800 286,500 Fixed expenses 81,000 178,000 86,000 Net operating income (loss) $45,000 $(65,200) $88,900 $(37,400) Contribution margin per unit $15 $8 $9

• Required B

	Case #1 Case #2 Case #3 Case #4 Sales $448,000 $190,000 $292,000 Variable expenses 129,200 87,600 Fixed expenses 62,000 469,000 Net operating income (loss) $67,680 $124,040 $(19,600) Contribution margin ratio (percent) 41 % % 84 % %

Answer 1

Requirement A
	Case #1	Case #2	Case #3	Case #4
Units Sold	8400	21150	19100	5400
Sales	$              2,68,800	$                   2,82,000	$                4,58,400	$        1,40,400
Variable expenses	$              1,42,800	$                   1,69,200	$                2,86,500	$           91,800
Fixed expenses	$                 81,000	$                   1,78,000	$                   83,000	$           86,000
Net Operating Income(loss)	$                 45,000	$                    -65,200	$                   88,900	$         -37,400
Contribution Margin per unit	$                        15	$                               8	$                            9	$                    9
Requirement B
	Case #1	Case #2	Case #3	Case #4
Sales	$              4,48,000	$                   1,90,000	$                7,06,000	$        2,92,000
Variable expenses	$              2,64,320	$                   1,29,200	$                1,12,960	$           87,600
Fixed expenses	$              1,16,000	$                      62,000	$                4,69,000	$        2,24,000
Net Operating Income(loss)	$                 67,680	$                      -1,200	$                1,24,040	$         -19,600
Contribution Margin Ratio	41%	32%	84%	70%