Water-Pacific Company sells a single product for $39.50 per unit. If variable expenses are 64.0 % of sales and fixed expenses total $13,500, the break-even point in quantity and dollar($) will be:

1. Water-Pacific Company sells a single product for $39.50 per unit. If variable expenses are 64.0 % of sales and fixed expenses total $13,500, the break-even point in quantity and dollar($) will be: 

2. Best Client Company has sales of 1,300 units at $60 a unit. Variable expenses are 45% of the selling price and total fixed expenses are $37,180. If Cartel Company expects next year’s total sales could increase 14%, they want to know how this change affects their profit. Calculate DOL and then, using DOL, calculate next year’s net income in dollar. 

4. The Assembly Department started the month with 59,000 units in its beginning WIP inventory. An additional 274,000 units were transferred in from the prior department during the month to begin processing in the Assembly Department. There were 21,000 units in the ending WIP inventory of the Assembly Department. How many units were transferred to the next processing department during ht month?

5. Central Company has two product lines, J and K. During June, the company's net operating income was $25,000, and the common fixed expenses were $37,000. The contribution margin ratio for J was 30%, its sales were $200,000, and its segment margin was $21,000. If the contribution margin for K was $80,000, Calculate the segment margin for K.

6. The Wall-shire Company has three divisions—Northern, Western, and Southern. The divisions have the following revenues and expenses: Northernn Western Southern
Sales $450,000 $410,000 680,000
Variable expenses 225,000 140,000 242,000
Traceable fixed expenses 165,000 105,000 218,000
Allocated common corporate expenses 92,000 85,000 135,000
Net operating income (loss) $(32,000) $ 80,000 $ 85,000

Management of Kosco is considering the elimination of the Northern Division. If the Northern Division were eliminated, its traceable fixed expenses could be avoided. The total common corporate expenses would be unaffected. Given these data, what is your decision, eliminating or keeping it and why? Justify your decision, showing your calculation, and overall company’s net operating income or loss, before and after eliminating Northern Division. 

7. Notterdam Corporation manufactures laser printers. Rowell currently manufactures the 32,000 imaging drums that it uses in its printers. The annual costs to manufacture these 32,000 drums are as follows: 

Cost of drum Total cost
Variable manufacturing cost …………… $23 $736,000
Fixed manufacturing cost ……………….. $65 $2,080,000
Total cost $88 $2,816,000

Hardware Solutions Inc. has offered to provide Rowell with all of its imaging drum needs for $72 per drum. If Rowell accepts this offer, 70% of the fixed manufacturing cost above could be totally eliminated. Also, Rowell will be able to use the freed up space to generate $240,000 of income each year in the production of alternative products.

Based on the information presented, would Rowell be better off to make the drums or buy the drums and by how much? 



8. Houseman Corporation bases its budget on machine-hours. The company’s static planning budget for November appears below:
Budgeted number of machine-hours ------------------------- 9,550
Budgeted variable costs:
Supplies (@$3.70 per machine-hour) ---------- $35,335
Power (@$2.40 per machine-hour) ----------------22,920
Budgeted fixed costs:
Salaries ----------------------------------------------- 46,850
Equipment depreciation ---------------------------- 31,250
Total cost ----------------------------------------------------- $136,355

Required: Prepare a flexible budget and total overhead cost at an activity level of 9,850 machine-hours per month.