Principles of Cost Accounting
17th Edition
ISBN: 9781305087408
Author: Edward J. Vanderbeck, Maria R. Mitchell
Publisher: Cengage Learning
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Textbook Question
Chapter 10, Problem 8E
The sales price per unit is $13 for the Voyageur Company’s only product. The variable cost per unit is $5. In 2016, the company sold 80,000 units, which was 10,000 units above the break-even point.
Compute the following:
- 1. Total fixed expenses. (Hint: First compute the contribution margin per unit.)
- 2. Total variable expense at the break-even volume.
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Students have asked these similar questions
Based on the below examples (1&2), how can I figure out which contribution margin is needed to calculate the required Break-even? Between (Contribution Margin Per Unit) or (Contribution Margin Ratio).
Example (1) (Why we didn't take CM/unit, but instead, CMR is calculated?)
Northern Pacific Fixtures Corporation sells a single product for $28 per unit. If variable expenses are 65% of sales and fixed expenses total $9,800, the break-even point is?
Example (2) (this one I know how to calculate).
Mishoe Corporation has provided the following contribution format income statement. All questions concern situations that are within the relevant range.
Sales (1,000 units)......................
$50,000
Variable expenses......................
32,500
Contribution margin.....................
17,500
Fixed expenses..........................
12,250
Net operating income..................
$5,250
The break-even point in unit sales is closest…
1. NewB Company sells bags with a selling price of P10,000 per bag and a variable cost of P4,000 per unit. NewB’s monthly fixed expense is P3,000,000. Let Q be the number of units manufactured
Required: a. Construct the total cost function
b. Construct the profit function
c. Compute the contribution margin ratio.
d. Compute total revenues needed to break even.
e. Determine the breakeven point in units sold and sales in pesos.
f. Compute required sales needed to achieve a target net income of₱1,500,000 in units sold and sales in pesos
g. Determine margin of safety if current sales is P8,750,000
Jackson Company recently calculated its break-even sales revenue to be $32,000. For each dollar of sales revenue, $0.75 goes to cover variable costs.
Compute the following.
The contribution margin ratio.
Total fixed costs.
The sales revenue that would have to be generated to earn an operating income of $40,000.
Chapter 10 Solutions
Principles of Cost Accounting
Ch. 10 - What is the difference between absorption costing...Ch. 10 - Distinguish between product costs and period...Ch. 10 - What effect will applying variable costing have on...Ch. 10 - What are the advantages and disadvantages of using...Ch. 10 - Prob. 5QCh. 10 - What is the difference between gross margin and...Ch. 10 - Why are there objections to using absorption...Ch. 10 - What are common costs?Ch. 10 - How is a contribution margin determined, and why...Ch. 10 - What are considered direct costs in segment...
Ch. 10 - What is cost-volume-profit analysis?Ch. 10 - Prob. 12QCh. 10 - What steps are required in constructing a...Ch. 10 - What is the difference between the contribution...Ch. 10 - What impact does income tax have on the break-even...Ch. 10 - Define differential analysis, differential...Ch. 10 - Prob. 17QCh. 10 - Prob. 18QCh. 10 - What are distribution costs?Ch. 10 - What is the purpose of the analysis of...Ch. 10 - In cost analysis, what determines which costs...Ch. 10 - Yellowstone Fabricators uses a process cost system...Ch. 10 - Using the information presented in E10-1, prepare...Ch. 10 - The chief executive officer of Acadia, Inc....Ch. 10 - The following production data came from the...Ch. 10 - A company had income of 50,000, using variable...Ch. 10 - The fixed overhead budgeted for Ranier Industries...Ch. 10 - Columbia Products Inc. has two divisions, Salem...Ch. 10 - The sales price per unit is 13 for the Voyageur...Ch. 10 - Teton, Inc. sells its only product for 50 per...Ch. 10 - A new product is expected to have sales of...Ch. 10 - Augusta Industries manufactures and sells two...Ch. 10 - A company has sales of 1,000,000, variable costs...Ch. 10 - Prob. 13ECh. 10 - A company has prepared the following statistics...Ch. 10 - Prob. 15ECh. 10 - Prob. 16ECh. 10 - Redwood Industries needs 20,000 units of a certain...Ch. 10 - Prob. 18ECh. 10 - Biscayne Industries has determined the cost of...Ch. 10 - Roosevelt Enterprises has determined the cost of...Ch. 10 - Prob. 3PCh. 10 - Prob. 4PCh. 10 - Prob. 5PCh. 10 - Arctic Software Inc. has two product lines. The...Ch. 10 - Prob. 7PCh. 10 - The production of a new product required Zion...Ch. 10 - Grand Canyon Manufacturing Inc. produces and sells...Ch. 10 - Prob. 10PCh. 10 - Emerald Island Company is considering building a...Ch. 10 - Royale Aluminum desires an after-tax income of...Ch. 10 - Deuce Sporting Goods manufactures a high-end model...Ch. 10 - Prob. 14PCh. 10 - Prob. 15PCh. 10 - Prob. 1MCCh. 10 - Denali Company manufactures household products...
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