Week 3 Written Assignment - Problems and Exercises

profileSharpguy
chapter_5_-_p9.xls
Home>Business & Finance homework help>Accounting homework help>Week 3 Written Assignment - Problems and Exercises

Template

P 05-09 Name:
Section:
Enter the appropriate amount or item in the shaded cells. Use the drop-down lists when available.
An asterisk (*) will appear next to an incorrect entry in the outlined cells.
Leave no cell blank. Ensure to enter "0" wherever applicable.
Breakeven Analysis and Planning Future Sales
1. 0 CM CM
a. BE Units = 0 0 0 CM per Unit CM per Unit
FC FC
= 0 0 0 FC per Unit FC per Unit
No. of Units No. of Units
= 0 units Revised SP P
Revised SP per Unit P per Unit
SP Revised SP
b. BE Dollars = 0 0 0 SP per Unit Revised SP per Unit
VC SP
= 0 VC per Unit SP per Unit
VC
VC per Unit
2.
Target Sales Units = ( 0 0 0 ) 0 0
= ( 0 0 0 ) 0 0
= 0 units
3.
a. Calculation of fixed costs covered.
CM +
Step 1 : 0 0 0 = 0 CM per Unit –
FC x
0 0 0 = 0 FC per Unit /
P
Step 2 : 0 0 0 = 0 P per Unit
Revised SP
0 0 0 = 0 Revised SP per Unit
SP
SP per Unit
VC
VC per Unit
b. Calculation of CM per unit required on remaining Units.
CM per Unit = ( 0 0 0 ) 0 0
= ( 0 0 0 ) 0 0
= 0 CM per Unit Required on Remaining Units
4. Proof:
0 0
Add: contribution margin already generated
0 Balance of CM to be generated
( 0 0 0 ) 0 Less: contribution margin already generated
Required contribution margin
0 0 Required fixed cost per unit
Required selling price
Required CM per Unit = 0
on Balance of Sales 0
= 0 Add: Contribution Margin Already Generated
0 Balance Of CM To Be Generated
Less: Contribution Margin Already Generated
= 0 Required Contribution Margin
Required Fixed Cost Per Unit
Required Selling Price
Remaining Sales Volume
Enter units value

Solution

P 19-09_Sol Name: SOLUTION
Section:
Enter the appropriate amount or item in the shaded cells. Use the drop-down lists when available.
An asterisk (*) will appear next to an incorrect entry in the outlined cells.
Leave no cell blank. Ensure to enter "0" wherever applicable.
Breakeven Analysis and Planning Future Sales
1. 0 CM CM
a. BE Units = FC / CM per unit CM per Unit CM per Unit
FC FC
= $1,200,000 / $6 FC per Unit FC per Unit
No. of Units No. of Units
= 200,000 units Revised SP P
Revised SP per Unit P per Unit
SP Revised SP
b. BE Dollars = 200,000 x $36 SP per Unit Revised SP per Unit
VC SP
= $7,200,000 VC per Unit SP per Unit
VC
VC per Unit
2.
Target Sales Units = ( FC + P ) / CM per unit
= ( $1,200,000 + $600,000 ) / $6
= 300,000 units
3.
a. Calculation of fixed costs covered.
CM +
Step 1 : SP – VC per Unit = CM per Unit CM per Unit –
FC x
$36 – $30 = $6 FC per Unit /
P
Step 2 : CM per Unit x No. of Units = FC P per Unit
Revised SP
$6 x 30,000 = $180,000 Revised SP per Unit
SP
SP per Unit
VC
VC per Unit
b. Calculation of CM per unit required on remaining Units.
CM per Unit = ( FC + P ) / No. of Units
= ( $820,000 + $290,000 ) / 370,000
= $3.00 CM per Unit Required on Remaining Units
4. Proof:
Required contribution margin $1,290,000
Add: contribution margin already generated
Less: contribution margin already generated Balance of CM to be generated
( 30,000 x $6 ) 180,000 Less: contribution margin already generated
Required contribution margin
Balance of CM to be generated $1,110,000 Required fixed cost per unit
Required selling price
Required CM per Unit = Balance of CM to Be Generated
on Balance of Sales Remaining Sales Volume
= $1,110,000 Add: Contribution Margin Already Generated
370,000 Balance Of CM To Be Generated
Less: Contribution Margin Already Generated
= $3.00 Required Contribution Margin
Required Fixed Cost Per Unit
Required Selling Price
Remaining Sales Volume
Enter units value