Question

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. Case #1 Case #2 Case #3 Case #4 Unit sold 8,200 19,800 5,100 Sales $237,800 $330,000 $137,700 Variable expenses 114,800 198,000 Fixed expenses 89,000 175,000 75,000 Net operating income (loss) $23,000 $192,200 $(18,900) Contribution margin per unit $15 $14 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 Sales $452,000 $194,000 $291,000 Variable expenses 118,340 93,120 Fixed expenses 53,000 471,000 Net operating income (loss) $71,840 $96,440 $(18,120) Contribution margin ratio (percent) 42% 82%

Answer 1

	Case #1	Case #2	Case #3	Case #4
Unit sold	8,200	13,200	19,800	5,100
Sales $	2,37,800	3,30,000	4,75,200	1,37,700
Variable expenses	1,14,800	1,32,000	1,98,000	81,600
Fixed expenses	89,000	1,75,000	85,000	75,000
Net operating income (loss)	34,000	23,000	1,92,200	-18,900
Contribution margin per unit	15	15	14	11
Contribution (Sales - Variable cost)	1,23,000	1,98,000	2,77,200	56,100
	Case #1	Case #2	Case #3	Case #4
Sales $	4,52,000	1,94,000	6,92,000	2,91,000
Variable expenses	2,62,160	1,18,340	1,24,560	93,120
Fixed expenses	1,18,000	53,000	4,71,000	2,16,000
Net operating income (loss)	71,840	22,660	96,440	-18,120
Contribution margin ratio (percent)	42%	39%	82%	68%
Contribution (Sales * Contribution margin ratio)	1,89,840	75,660	5,67,440	1,97,880