Exercise

Question 1

Meriden Company has a unit selling price of $650, variable costs per unit of $325, and fixed costs of $238,875. Compute the break-even point in units using the mathematical equation.

Question 2

For Turgo Company, variable costs are 56% of sales, and fixed costs are $173,600. Management’s net income goal is $124,236. Compute the required sales in dollars needed to achieve management’s target net income of $124,236.

Question 3

For Kozy Company, actual sales are $1,278,000 and break-even sales are $881,820. Compute the margin of safety in dollars and the margin of safety ratio.

Question 4

Montana Company produces basketballs. It incurred the following costs during the year.

What are the total product costs for the company under variable costing?

Question 6

For the quarter ended March 31, 2012, Maris Company accumulates the following sales data for its product, Garden-Tools: $313,000 budget; $330,300 actual. Prepare a static budget report for the quarter.

Question 7

Gundy Company expects to produce 1,226,880 units of Product XX in 2012. Monthly production is expected to range from 81,010 to 123,590 units. Budgeted variable manufacturing costs per unit are: direct materials $4, direct labor $7, and overhead $11. Budgeted fixed manufacturing costs per unit for depreciation are $6 and for supervision are $3. Prepare a flexible manufacturing budget for the relevant range value using 21,290 unit increments.  (List variable costs before fixed costs.)