Ziegler Inc. has decided to use the high-low method to estimate the total cost a

Question

Ziegler Inc. has decided to use the high-low method to estimate the total cost and the fixed and variable cost components of the total cost. The data for various levels of production are as follows:

a. Determine the variable cost per unit and the total fixed cost.

b. Based on part (a), estimate the total cost for 3,730 units of production.

$

a. Young Company budgets sales of $720,000, fixed costs of $43,700, and variable costs of $194,400. What is the contribution margin ratio for Young Company? (Enter your answer as a whole number.)
%

b. If the contribution margin ratio for Martinez Company is 35%, sales were $643,000, and fixed costs were $180,040, what is the income from operations?
$

For a recent year, McDonald's Company-owned restaurants had the following sales and expenses (in millions):

Assume that the variable costs consist of food and packaging, payroll, and 40% of the general, selling, and administrative expenses.

a. What is McDonald's contribution margin? Round to the nearest million. (Give answer in millions of dollars.)
$ million

b. What is McDonald's contribution margin ratio?
%

c. How much would income from operations increase if same-store sales increased by $2,300 million for the coming year, with no change in the contribution margin ratio or fixed costs? Round your answer to the closest million.
$ million

Break-Even Sales and Sales to Realize Income from Operations

For the current year ended October 31, Friedman Company expects fixed costs of $682,000, a unit variable cost of $62, and a unit selling price of $93.

a. Compute the anticipated break-even sales (units).
units

b. Compute the sales (units) required to realize income from operations of $158,100.
units

Currently, the unit selling price of a product is $320, the unit variable cost is $260, and the total fixed costs are $972,000. A proposal is being evaluated to increase the unit selling price to $350.

a. Compute the current break-even sales (units).
units

b. Compute the anticipated break-even sales (units), assuming that the unit selling price is increased and all costs remain constant.
units

Rotelco is one of the largest digital wireless service providers in the United States. In a recent year, it had approximately 100 million direct subscribers (accounts) that generated revenue of $54,300 million. Costs and expenses for the year were as follows:

Assume that 70% of the cost of revenue and 30% of the selling, general, and administrative expenses are variable to the number of direct subscribers (accounts).

a. What is Rotelco's break-even number of accounts, using the data and assumptions above? Round to the nearest whole number.
million accounts

b. How much revenue per account would be sufficient for Rotelco to break even if the number of accounts remained constant? Round to the nearest dollar.
$ million per account

Sales Mix and Break-Even Sales

Dragon Sports Inc. manufactures and sells two products, baseball bats and baseball gloves. The fixed costs are $1,013,200, and the sales mix is 20% bats and 80% gloves. The unit selling price and the unit variable cost for each product are as follows:

a. Compute the break-even sales (units) for the overall enterprise product, E.
units

b. How many units of each product, baseball bats and baseball gloves, would be sold at the break-even point?

units

Margin of Safety

a. If Canace Company, with a break-even point at $336,300 of sales, has actual sales of $590,000, what is the margin of safety expressed (1) in dollars and (2) as a percentage of sales? Round the percentage to the nearest whole number.

1. $

2.   %

b. If the margin of safety for Canace Company was 25%, fixed costs were $1,621,875, and variable costs were 75% of sales, what was the amount of actual sales (dollars)?
(Hint: Determine the break-even in sales dollars first.)
$

Break-Even and Margin of Safety Relationships

At a recent staff meeting, the management of Boost Technologies Inc. was considering discontinuing the Rocket Man line of electronic games from the product line. The chief financial analyst reported the following current monthly data for the Rocket Man:

If 420,000 units are sold and sales at the break-even point are 472,500 units, there is margin of safety.

Operating Leverage

Beck Inc. and Bryant Inc. have the following operating data:

a. Compute the operating leverage for Beck Inc. and Bryant Inc. If required, round to one decimal place.

b. How much would income from operations increase for each company if the sales of each increased by 10%? If required, round answers to nearest whole number.

c. The difference in the of income from operations is due to the difference in the operating leverages. Beck Inc.'s operating leverage means that its fixed costs are a percentage of contribution margin than are Bryant Inc.'s

Explanation / Answer

1) Variable cost per unit = Change in cost/change in unit

= (277200-178200)/(7425-2925)

Variable cost per unit = 22 per unit

Fixed cost =Total cost-variable cost

= 277200-(7425*22)

Fixed cost = 113850

Cost on 3730 units = (3730*22+113850) = 195910

Note : Please post each question individually for answer.

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