1) Basic CVP Analysis
The manager of Kima's Food Mart estimates operating costs for the year will include $740,000 in fixed costs.
Required:
(a) Find the break-even point in sales dollars with a contribution margin ratio of 40 percent.(Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)
Break even point in sales dollars $
(b) Find the break-even point in sales dollars with a contribution margin ratio of 28 percent.(Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)
Break even point in sales dollars $
(c) Find the sales dollars required to generate a profit of $130,000 for the year assuming a contribution margin ratio of 40 percent. (Round your answer to the nearest dollar amount. Omit the "$" sign in your response.)
Sales required $
2) Components of Full Costs
Larcker Manufacturing's cost accountant has provided you with the following information for January operations:
|
Direct materials
|
$
|
38
|
per unit
|
|
Fixed manufacturing overhead costs
|
$
|
225,000
|
|
|
Sales price
|
$
|
200
|
per unit
|
|
Variable manufacturing overhead
|
$
|
19
|
per unit
|
|
Direct labor
|
$
|
35
|
per unit
|
|
Fixed marketing and administrative costs
|
$
|
190,000
|
|
|
Units produced and sold
|
|
5,500
|
|
|
Variable marketing and administrative costs
|
$
|
8
|
per unit
|
Requirement 1: Determine the variable cost per unit. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Variable cost per unit $
Requirement 2: Determine the variable manufacturing cost per unit. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Variable manufacturing cost per unit $
Requirement 3:
Determine the full absorption cost per unit. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Full absorption cost per unit $
Requirement 4:
Determine the full cost per unit. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Full cost per unit $
Requirement 5:
Determine the profit margin per unit. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Profit margin per unit $
Requirement 6:
Determine the gross margin per unit. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Gross margin per unit $
Requirement 7:
Determine the contribution margin per unit. (Round your answer to 2 decimal places. Omit the "$" sign in your response.)
Contribution margin per unit $
Exercise 2-39 Gross Margin and Contribution Margin Income Statements
Larcker Manufacturing's cost accountant has provided you with the following information for January operations:
|
Direct materials
|
$
|
32
|
per unit
|
|
Fixed manufacturing overhead costs
|
$
|
226,000
|
|
|
Sales price
|
$
|
195
|
per unit
|
|
Variable manufacturing overhead
|
$
|
21
|
per unit
|
|
Direct labor
|
$
|
26
|
per unit
|
|
Fixed marketing and administrative costs
|
$
|
185,000
|
|
|
Units produced and sold
|
|
5,900
|
|
|
Variable marketing and administrative costs
|
$
|
7
|
per unit
|
Required:
(a) A gross margin income statement. (Input all amounts as positive values. Omit the "$" sign in your response.)
Gross Margin Income Statement
Variable marketing and administrative costsRevenueFixed manufacturing costsFixed marketing and administrative costsVariable manufacturing costs $
Fixed manufacturing costsRevenueFixed marketing and administrative costsVariable marketing and administrative costsVariable manufacturing costs
Variable manufacturing costsRevenueVariable marketing and administrative costsFixed manufacturing costsFixed marketing and administrative costs
Gross lossGross margin $
Fixed manufacturing costsVariable marketing and administrative costsVariable manufacturing costsFixed marketing and administrative costsRevenue
Fixed manufacturing costsVariable marketing and administrative costsFixed marketing and administrative costsVariable manufacturing costsRevenue
Operating lossOperating profit $
(b) A contribution margin income statement. (Input all amounts as positive values. Omit the "$" sign in your response.)
Contribution Margin Income Statement
Variable marketing and administrative costsVariable manufacturing costsRevenueFixed manufacturing costsFixed marketing and administrative costs $
Fixed manufacturing costsFixed marketing and administrative costsRevenueVariable marketing and administrative costsVariable manufacturing costs
Variable manufacturing costsRevenueFixed manufacturing costsVariable marketing and administrative costsFixed marketing and administrative costs
Fixed marketing and administrative costsContribution marginVariable manufacturing costsRevenueVariable marketing and administrative costs $
Contribution marginFixed manufacturing costsRevenueFixed marketing and administrative costsVariable manufacturing costs
Contribution marginVariable manufacturing costsRevenueFixed marketing and administrative costsFixed manufacturing costs
Operating lossOperating profit