I need help with part 2 cost and volume relationship and can you please check to

Question

I need help with part 2 cost and volume relationship and can you please check to see if my answer is right for projected cost?

Fixed and Variable Cost Determinations Unit Cost Calculations The projected cost of a lamp is calculated based upon the projected increases or decreases to current costs. The present costs to manufacture one lamp are: Figurines ElectricalSets Lamp Shade Direct Labor; Variable Overhead: Fixed Overhead: $9.2000000 per lamp 1.2500000 per lamp 6.0000000 per lamp 2.2500000 per lamp (4 Lamps/hr.) 0.2250000 per lamp 10.0000000 per lamp (based on normal capacity of 25,000 lamps) Cost per lamp: $28.9250000 per lamp Expected increases for 2017 When calculating projected increases round to SEVEN decimalplaces,$0.0000000. 1. Material Costs are expected to increase by 3.50%. 2, Labor Costs are expected to increase by 3.00% 3, Variable Overhead is expected to increase by 5.00%. 4. Fixed Overhead is expected to Increase to $255,000. 5. Fixed Administrative expenses are expected to Increase to $46,000 6. Variable selling expenses (measured on a per lamp basis) are expected to increase by 5.50%. 7. Fixed selling expenses are expected to be $31,000 in 2017 8. Variable administrative expenses (measured a per lamp basis) are expected to Increase by 3.00%. On the following schedule develop the following figures: 1- 2017 Projected Variable Manufacturing Unit Cost of a lamp. 2- 2017 Projected Variable Unit Cost per lamp. 3- 2017 Projected Fixed Costs.

Explanation / Answer

Part B)

1)

contribution per unit :price -variable cost

45-22.9645500

22.0354500

contribution margin ratio =contribution /price

     = 22.03545/45

    = 48.9676667%

2)Breakeven =Fixed cost /contribution per unit

=332000/22.0354500

= 15067 lamps

3)Breakeven unit =[Fixed cost+operating income ]/contribution per unit

   =[332000+276500]/22.0354500

       = 608500/22.0354500

      = 27615 units

4)Let number of units sold to breakeven be x

operating income desired :.26*x

x =[332000+.26x]/22.0354500

22.0354500x = 332000+.26x

22.0354500x-.26x = 332000

     x= 332000/21.77545

=   15247 units

**for your calculation part ,it is perfectly correct.

Related Questions

Navigate

• Browse (All)
• Browse I
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.