COST ACCOUNTING 9TH EDITION

Chapter 20

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COST ACCOUNTING 9TH EDITION

CHAPTER 20 EXERCISES
Exercise 20.1 Woliver Company Fixed Cost C.M Per Unit Break Even in Units= Break Even in Dollars= 6000 1.2 5000 10000 Units Dollars

2*60% 6000/1.2 6000/.6

Exercise 20.2 Sales Variable Cost 1 Contribution Margin Fixed Cost Profit 2 3 Contribution Margin Ratio Break Even point in Dollars

$ 7640000 4736800 2903200 2451000 452200 2903200/7640000 2451000/.38 38 6E+06 %

Exercise 20.3 Sale Price per unit Variable Cost Contribution Margin Contribution Margin Ratio Fixed Cost 1 2 3 Break Even Point in Dollars= Break Even Pint in Units= Target Sales=

2.5 1.675 0.825 .825/2.5 4290 4290/.33 4290/.825 4290+8250/.825

33

13000 5200 38000

Dollars Units Dollars

Exercise 20.4 Sale Price per unit Variable Cost Contribution Margin Contribution Margin Ratio Fixed Cost 1 2 3 4 Break Even Point in Dollars= Break Even Pint in Units= Target Units to be sold= Target Sales=

5 3 2 2/5 26000 26000/.4 26000/2 26000+10000/2 26000+10000/.4 65000 13000 18000 90000 Dollars Units Units Dollars 0.4 %

Exercise 20.9 At 100 Capacity Units= Variable Cost=

350 742

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Variable Cost at 90%= Fixed Cost Total Cost Unit Cost 667.8 1008 1675.8 5.32 per Unit 315 Units

Exercise 20.10 Fixed Cost Fixed FOH Fixed Marketing Exp Fixed Admn Exp Total Fixed Cost Variable Cost Direct Labour Direct Material Variable FOH Variable Marketing Variable Admin Total Variable Cost Sales Contribution C.M Ratio 1 2 Break Even Point in Units Incrase in Sales Increase in Variable Cost Contribution Margin Fixed Cost Profit Break Even Point in Dollars 2990/46 10000*125% 5400*125% 1500 1400 1000 1000 500 5400 10000 4600 46 65 % Units 12500 6750 5750 2990 2760 8000 Dollars 990 1000 1000 2990

2990+690/.46

Exercise 20.5 Margin of Safety= Margin of Safety Ratio

2000000-1500000 (20000001500000)/2000000*100

500000

Dollars

25

Exercise 20.6 Fixed Cost= CM Ratio= Break Even Sales= Actual Sales=

9300 62% 9300/.62 15000*100/75 15000 20000 Dollars Dollars

Profit For The Month= Sales Variable Cost

20000 7600

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Contribution Margin Fixed Cost Profit 12400 9300 3100 15.500%

Or Profit Ratio= Margin of safety Ratio* CM Ratio 20000*15.5% 3100

Exercise 20.7 Fixed Cost= CM Ratio= Break Even Sales= Actual Sales=

30000 60% 30000/.6 50000*100/80 50000 62500 Dollars Dollars

Profit For The Month= Sales 62500 Variable Cost 25000 Contribution Margin 37500 Fixed Cost 30000 Profit 7500 Or Profit Ratio= Margin of safety Ratio* CM Ratio 62500*12% 7500

12.000%

Exercise 20.8 Sales Variable Cost Contribution Margin Fixed Cost Planned Profit Exercise 20.11

A 100000*4 400000 280000 200000*3

B 600000 480000

Total 1000000 760000 240000 100000 140000

Table Sale Price of Package 60*1 Variable Cost of Package 35*1 Contribution Margin of Package Total Fixed Cost C.M Ratio 45/120 60 35 30*2 20*2

Chair 60 40

Total 120 75 45 675000

37.5

Break Even Point in Dollars Break Even point in Units

675000/.375 675000/45 Tables Chairs

1800000 15000 60 30

Dollars Package 900000 900000 1800000

15000 30000

Exercise 20.12 L Sale Price of Package 20*2 Variable Cost of Package 12*2 Contribution Margin of Package Total Fixed Cost 40 24 15*3 10*3 M 45 30 Total 85 54 31 372000

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C.M Ratio 31/85 36.47059 0.364706 372000/.3647 372000/31 L M %

1 2

Break Even Point in Dollars Break Even point in Units

1020000 12000 20 15

Dollars Package 480000 540000 1020000 Dollars Packages 600000 675000 1275000

24000 36000

3 4

Target Sales Target Units

372000+93000/.364 372000+93000/31 L M

1275000 15000 20 15

30000 45000

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