1. Thomas Train has collected the following information over the last six months.
Month Units produced Total costs
March 10,000 $25,600
April 12,000 26,200
May 19,000 27,600
June 13,000 26,450
July 12,000 26,000
August 15,000 26,500
Using the high-low method, what is the variable cost per unit?
2. Rooter's Cleaning Services provided data concerning the costs incurred to clean hotel rooms for which hotel customers pay $150 per night. Data for the past 7 months are as follows:
|
|
January
|
February
|
March
|
April
|
May
|
June
|
July
|
|
Number of rooms cleaned
|
250
|
160
|
200
|
150
|
285
|
170
|
260
|
|
Cleaning cost
|
$6,450
|
$4,060
|
$5,100
|
$4,100
|
$7,000
|
$4,200
|
$6,530
|
How much are estimated monthly variable costs using the high-low method?
3. Winny's Office Furniture has a contribution margin ratio of 16%. If fixed costs are $183,300, how many dollars of revenue must the company generate in order to reach the break-even point?
4. Tim Taylor has written a self improvement book that has the following cost characteristics:
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Selling Price
|
$16.00 per book
|
|
Variable cost per unit:
|
|
|
Production
|
$4.00
|
|
Selling & administrative
|
2.00
|
|
Fixed costs:
|
|
|
Production
|
$92,400 per year
|
|
Selling & administrative
|
24,600 per year
|
How many units must be sold to break-even?
5. Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $80, unit variable cost is $35, and the fixed costs per month are $5,000.