Witten Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 55,100 S 43,100 Variable Element per Customer Served S S S A total of 27 customers were actually served during January. The total expenses in the flexible budget for January would have been closest to: 6,600 1,000 600

Witten Corporation is a service company that measures its output by the number of customers served. The company has provided the following fixed and variable cost estimates that it uses for budgeting purposes. Revenue Employee salaries and wages Travel expenses Other expenses Fixed Element per Month $ 55,100 S 43,100 Variable Element per Customer Served S S S A total of 27 customers were actually served during January. The total expenses in the flexible budget for January would have been closest to: 6,600 1,000 600

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 42E: Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller...

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Required: a) Using Activity Based Costing, calculate the rate for each cost driver. b) Using activity based budgeting, prepare a budgeted yearly operating statement for Aero3D Ltd. Show the following separately, within the statement. i. The budgeted output for each product per year; ii. The contribution to profits for each product and in total before charging activity based costs; iii. The profit for each product and in total after charging activity based costs but before charging core costs (non-activity based costs); iv. The total profit after charging core based costs.
Classify each of the following actions as either being associated with the financial accounting information system (FS) or the cost management information system (CMS): a. Determining the total compensation of the CEO of a public company b. Issuing a quarterly earnings report c. Determining the unit product cost using TDABC d. Calculating the number of units that must be sold to break even e. Preparing a required report for the SEC f. Preparing a sales budget g. Using cost and revenue information to decide whether to keep, or drop, a product line h. Preparing an annual statement of financial position that conforms to generally accepted accounting principles (GAAP) i. Using cost and revenue information to decide whether to invest in a new production system or not j. Reducing costs by improving the overall quality of a product k. Using a debt-equity ratio and liquidity ratios from a balance sheet to assess the likelihood of bankruptcy l. Using a public companys financial statements to decide whether or not to buy its stock
Sales Revenue Approach, Variable Cost Ratio, Contribution Margin Ratio Arberg Companys controller prepared the following budgeted income statement for the coming year: Required: 1. What is Arbergs variable cost ratio? What is its contribution margin ratio? 2. Suppose Arbergs actual revenues are 30,000 more than budgeted. By how much will operating income increase? Give the answer without preparing a new income statement 3. How much sales revenue must Arberg earn to break even? Prepare a contribution margin income statement to verify the accuracy of your answer. 4. What is Arbergs expected margin of safety? 5. What is Arbergs margin of safety if sales revenue is 380,000?
PROBLEM III, Silva Corporation uses an absorption costing system for internal reporting purposes, At present, however, it is considering to use the variable costing system, Following are some data regarding Silva Corporation's budgeted and actual operations for the calendar year 2008: BUDGETED 25,200 18,480 8,400 10,640 16,800 14,700 4,200 6,300 104,720 COSTS ACTUAL 23,400 17,160 7,800 10,000 15,000 14,700 3,750 6,375 98,185 Materials Labor Variable Factory Overhead Fixed Factory Overhead Variable Selling Expenses Fixed Selling Expenses Variable Administrative Expenses Fixed Administrative Expenses Actual Budgeted (Units) (Units) Finished Goods Beginning Inventory Production Sales 280 280 1,120 1,120 1,040 1,000 The budgeted costs were computed based on the budgeted production and sales of 1,120 units, the company's normal capacity level, Silva Corporation uses a predetermined factory overhead rate for applying manufacturing overhead costs to its product, The denominator level used in…
S Campbell Company has provided the following Year 2 data. Budget Sales Variable product costs Variable selling expense Other variable expenses. Fixed product costs Fixed selling expense Other fixed expenses Interest expens Variances Sales Variable product costs Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense CAMPBELL COMPANY Internal Income Statement for Year 2 Budget Required Prepare a budgeted and actual income statement for internal use. Sales Variable expenses: Product costs Selling expenses Other expenses Contribution margin $ 519,000 202,000 47,000 3,000 16,400 23,600 1,600 690 Fixed expenses: Product costs 7,800 Unfavorable 4,400 Favorable 2,100 Unfavorable 1,800 Unfavorable 300 Favorable 470 Favorable 110 Unfavorable 100 Favorable Actual
Benson Company has provided the following Year 2 data. Budget Sales Variable product costs Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense Variances Sales Variable product costs Variable selling expense Other variable expenses Fixed product costs Fixed selling expense Other fixed expenses Interest expense BENSON COMPANY Internal Income Statement for Year 2 Budget Required Prepare a budgeted and actual Income statement for Internal use. Sales Variable expenses: Product costs $504,000 186,000 46,000 3,300 16,500 23,400 1,900 700 Selling expenses Other expenses Contribution margin Fixed expenses: Product costs Selling expenses Other expenses Operating income (loss) Interest expense Net income (loss) 8,600 Unfavorable 4,200 Favorable 2,300 Unfavorable 1,700 Unfavorable 310 Favorable 490 Favorable 190 Unfavorable 90 Favorable Actual
The following data relate to Department no. 3 of Tsing Corporation: Segment contribution margin 540,000 Profit margin controllable by segment manager 310000 Segment profit margin 150000 On the basis of this information, Department no. 3's variable operating expenses are: Select one: a. $80,000. b. $160,000. c. $230,000. d. $390,000. e. not determinable.
3)Some cost information of the enterprise, which calculates its costs according to the Standard Cost Method, is as follows.Total Budgeted Fixed General Production Expenses = 2.000.-₺Unit Budgeted Variable General Production Expense = 1,10.-₺/brTotal Actual Direct Labor Hours = 1.500 DİSTotal Standard Direct Labor Hours = 1.300 DISRequested: Calculate the “Efficiency Difference of General Production Costs”. A. 120.-₺ positiveB. 320.-₺ negativeC. 120.-₺ negativeD. 320.-₺ positiveE. 220.-₺ negativeF. 220.-₺ positive
The accountant for PNW, LLC has prepared a contribution format income statement. Assume that the following information is within the relevant range. Sales (9,000 units) Variable expenses Contribution margin Fixed expenses $540,000 405,000 135,000 130,500 Net operating income $ 4,500 Assuming that the information provided is within the relevant range, the contribution margin ratio is closest to:
6. Using a responsibility income statement Shown below is the current monthly income statement of Metro Video, by profit centers: Sales Variable Costs Contribution margin Fixed costs traceable to departments Departments responsibility margins Common fixed costs Income from operations METRO VIDEO Income Statement by Profit Centers For the Month Ended April 30, 20 Metro Video Dollars % $560,000 100 (268,800) (48) $291,200 52 (67,200) (12) $224,000 (61,600) $162,400 40 29 Equipment Sales Dollars $280,000 (198,800) $ 81,200 (25,200) Segments $56,000 % 100 71) 29 (09) Video Rentals Dollars $280,000 (70,000) $210,000 (42,000) 20 $168,000 % 100 (25) 75 (15) 60 On the basis of this information, compute the increase in monthly income from operations that may be expected to result from each of the following actions: (a) Spending $5,000 per month in advertising is expected to increase sales in the Equipment Sales Department by 35%. $_ (b) Closing the Equipment Sales Department and allowing the…
The following information relates to a department of I. Graham Standard Costs and Operating Performance Measures Standard Costs and Operating Performance Measures 33. 357 Company for the fourth quarter 2018: Actual total overhead (fixed plus variable) Budget formula... Total overhead application rate... Spending variance Volume variance... P178,500 P110,000 plus PO.50 per hour P1.50 per hour P8,000 unfavorable P5,000 favorable ..... The total overhead variance is divided into three variances: spending, efficiency, and volume. What were the actual hours worked in this department during the quarter? 110,000 b. a. 137,000 153,000 с. 121,000 d. Refer to Question no. 33. What were the standard hours ailowed for good output in this department during the quarter? 105,000 b. 34. 120,000 115,000 a. C. 106,667 d. 35. Refer to Question no. 33. Each unit takes five hours to manufacture, and the selling price is P4.50 per unit. Based on the overhead budget fermula, how many units must be sold to…
The controller of Ashton Company prepared the following projected income statement: Sales $97,000 Total variable cost 32,850 Total fixed cost 43,800 Operating income $20,440 Required: Calculate the contribution margin ratio?