Ask Question, Ask an Expert


Ask Managerial Accounting Expert

problem 1: High-Low Method Campus Copy and Printing wants to predict copy machine repair expense at different levels of copying activity (number of copies made). The given data have been gathered:

Month Repair Expense    Copies Made    Copy Machine
May                            $ 8,500           300,000
June                            12,500            500,000
July                             20,500            900,000
August                         16,500            700,000
September                    10,500            400,000


Find out the fixed and variable components of repair expense by using the high-low method. Use copies made as the measure of activity.

problem 2: CVP Analysis Gabby’s Wedding Cakes creates elaborate wedding cakes. Each cake sells for $600. The variable cost of making the cakes is $250, and the fixed cost per month is $7,700.


a) Compute the break-even point for a month in units.
b) How many cakes should be sold to earn a monthly profit of $10,000?

problem 3: CVP Analysis, Profit Equation Clyde’s Marina has estimated that fixed costs per month are $300,000 and variable cost per dollar of sales is $0.40.


a) Determine the break-even point per month in sales dollars?
b) What level of sales dollars is needed for a monthly profit of $60,000?
c) For the month of July, the marina anticipates sales of $1,000,000. Find out the expected level of profit?

problem 4: Contribution Margin Rhetorix, Inc. produces stereo speakers. The selling price per pair of speakers is $900. The variable cost of production is $300 and the fixed cost per month is $60,000.


a) Compute the contribution margin related with a pair of speakers.
b) In August, the company sold six more pairs of speakers than planned. Determine the expected effect on profit of selling the additional speakers?
c) Compute the contribution margin ratio for Rhetorix related with a pair of speakers. (Round to 2 decimal places.)
d) In October, the company had sales that were $7,000 more than planned. What is the expected effect on profit related to the additional sales?

problem 5: Margin of Safety Rhetorix, Inc. produces stereo speakers. The selling price per pair of speakers is $900. The variable cost of production is $300 and the fixed cost per month is $60,000. For November, the company predicts to sell 130 pairs of speakers.


a) Compute expected profit.
b) Compute the margin of safety in dollars.

problem 6: “What If” Analysis Rhetorix, Inc. produces stereo speakers. The selling price per pair of speakers is $900. The variable cost of production is $300 and the fixed cost per month is $60,000.


Compute the expected profit for November supposing the company sells 130 pairs of speakers as planned, however the selling price changes to $1,200.

problem 7: High-Low, Break-Even Lancer Audio produces a high-end DVD player which sells for $1,300. Total operating expenses for the past 12 months are as shown:


a) Use the high-low method to estimate fixed and variable costs.
b) Based on such estimates, compute the break-even level of sales in units. (Round to the near whole unit.)
c) Compute the margin of safety for the coming August supposing estimated sales of 165 units.
d) Estimate total profit supposing production and sales of 165 units.
e) Comment on the limitations of the high-low technique in estimating costs for Lancer Audio.

problem 8: Throughout the year, Xenoc produces 1,200 pairs of speakers and sells 1,000 pairs.


a) Find out the value of ending inventory by using full costing?
b) Find out the value of ending inventory by using variable costing?
c) Find out the cost of goods sold by using full costing?
d) What is the variable cost of goods sold?
e) Determine net income by using full costing?
f) Find out the net income by using variable costing?

problem 9: Variable and Full Costing: Income Effect of Clearing Excess Inventory. The given information is available for Dunworth Canoes, a company which builds inexpensive aluminum canoes:

2011 2012    Total

Units Produced                                               18,000               14,000              32,000
Units sold                                                       16,000               16,000             32,000
Selling price per unit                                         $ 500                 $ 500
Variable production costs per unit                       $ 200                 $ 200
Direct material per unit                                     $ 80                    $ 80
Direct labor per unit                                         $ 50                    $ 50
Variable manufacturing overhead per unit             $ 70                    $ 70
Fixed manufacturing overhead per year                $630,000              $630,000
Fixed selling and administrative expense per year   $200,000              $200,000

In its first year of operation, the company generated 18,000 units however were able to sell only 16,000 units. In its second year, the company required to get rid of excess inventory (the extra 2,000 units produced but not sold in 2011) so it cut back production to 14,000 units.


a) Compute profit for both years by using full costing.
b) Note that profit has declined in the year 2012. Is company performance actually worse in 2012 compared to 2011?
c) Compute profit for both years by using variable costing.
d) Does variable costing profit present a more realistic view of firm performance in the two years? Describe.

Managerial Accounting, Accounting

  • Category:- Managerial Accounting
  • Reference No.:- M9749

Have any Question? 

Related Questions in Managerial Accounting

Assignmentyou are a manager of table top limited a

Assignment You are a manager of Table Top Limited, a manufacturer of small tables . You have been instructed to prepare a budget for the next year's operations with the following forecast: The sales volume is forecast to ...

Individual research paper instructions1write a 8-10-page

INDIVIDUAL RESEARCH PAPER INSTRUCTIONS 1. Write a 8-10-page, double-spaced research paper that adheres to APA format. 2. It must include references from at least 6 different sources, a title page, and a reference page. 3 ...

Venus brewery is a craft brewery that produces a special

Venus Brewery is a craft brewery that produces a special light beer for ladies. The beer are processed sequentially in two departments (Department X and Department Y) before the final products are transferred to the fini ...

Management accounting assignmentquestion 1 a how do fixed

Management Accounting Assignment Question 1: a. How do fixed costs in a business create a problem for job costing? b. Provide examples of wages that might be deemed to be (1) a direct cost and (2) an indirect costs. Ques ...

Accounting for managers- assignmentfinancial statement

Accounting for Managers- Assignment Financial Statement Analysis The following information relates to Harris Corporation. Account Current year Prior year Net sales (all credit) $520,125 $499,500 Cost of goods sold $375,9 ...

Managerial accounting assignment questionwidget airlines is

Managerial Accounting Assignment Question Widget Airlines is a leading business in travelling industry and has experienced turbulent times during the past 10 years due to stiff competition and as a result of global slowd ...

Dillon jones and kline ltd is studying the acquisition of

Dillon, Jones, and Kline, Ltd. is studying the acquisition of two electrical component insertion systems for producing its sole product, the universal gismo. Data relevant to the systems follow. Model A: Variable costs, ...

Managerial accounting assignment task specification-group

Managerial Accounting Assignment Task Specification- Group Report: "Measuring Performance and Management Control Systems" - A review of control systems reported in 2016 annual reports in Australian Public Companies. Subj ...

Task question 1 1000 wordsmather and peison 2006 report

Task Question 1 (1000 words) Mather and Peison (2006) report that public debt contracts tend to have a lower average number of accounting based debt covenants as well as less binding debt covenants relative to private de ...

Managerial accounting budgeting project- springthe

Managerial Accounting Budgeting Project- Spring The following is a Comprehensive Budgeting Problem. You and your team need to prepare a partial Master Budget and then continue on to analyze your data. This is an Excel ba ...

  • 4,153,160 Questions Asked
  • 13,132 Experts
  • 2,558,936 Questions Answered

Ask Experts for help!!

Looking for Assignment Help?

Start excelling in your Courses, Get help with Assignment

Write us your full requirement for evaluation and you will receive response within 20 minutes turnaround time.

Ask Now Help with Problems, Get a Best Answer

WalMart Identification of theory and critical discussion

Drawing on the prescribed text and/or relevant academic literature, produce a paper which discusses the nature of group

Section onea in an atwood machine suppose two objects of

SECTION ONE (a) In an Atwood Machine, suppose two objects of unequal mass are hung vertically over a frictionless

Part 1you work in hr for a company that operates a factory

Part 1: You work in HR for a company that operates a factory manufacturing fiberglass. There are several hundred empl

Details on advanced accounting paperthis paper is intended

DETAILS ON ADVANCED ACCOUNTING PAPER This paper is intended for students to apply the theoretical knowledge around ac

Create a provider database and related reports and queries

Create a provider database and related reports and queries to capture contact information for potential PC component pro