# mho data by uc86

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```									                                             PROBLEM 1

Net Income                                 \$      62,000
Depreciation expense                       \$      16,000
Amortization expense                       \$       3,000
Loss on sale of fixed assets               \$       2,000
Increase in Account Receivable             \$      (9,200)
Decrease in Inventory                      \$       5,900
Decrease in Prepaid rent                   \$          300
Increase in account payable                \$       2,400
Decrease in wages payable                  \$        (700)
Decrease in Tax payable                    \$       1,100
Cash provided by operating activities      \$      20,800

Problem 2
Required No. a

Solution

Sales                                                  \$        450,000
Variable Cost of goods sold (\$200,000-\$50,000)         \$        150,000
Variable Operating expense (\$196,000-\$166,000)         \$         30,000
Contribution margin                                    \$        270,000

Required No. b

Solution

Contribution margin ratio =?

Contribution margin ratio = \$270,000/\$450,000

Contribution margin ratio = 0.60 or 60%

Required No. c

Solution

Break-even volume in sale dollar =?

Break-even volume in sale dollar = (\$50,000+\$166,000) / 60%
Break-even volume in sale dollar = \$360,000

PROBLEM 2 (continued)

Required No. a

Solution

Contribution margin per unit =?

Contribution margin per unit =\$68.50-\$50.95

Contribution margin per unit =\$17.55

Required No. b

Solution

Contribution margin ratio =?

Contribution margin ratio = (\$68.50-\$50.95)/\$68.50

Contribution margin ratio = 25.62%

Required No. c

Solution

Break-even point in unit =?

Break-even point in unit = \$500,000 / (\$68.50-\$50.95)

Break-even point in unit = 28,490 units

Required No. d

Solution

Break-even volume in dollar =?

Break-even volume in dollar = \$500,000 /[\$68.50-\$50.95/\$68.50]

Break-even volume in dollar = \$1,951,567

PROBLEM 3

1)    D
2)    A
3)    B
4)    B
5)    D
6)    C
7)    B
8)    D
9)    B
10)   C

PROBLEM 4

Solution

Without             Effect of       With Special
Special Order       Special Order              Order

Units                                 2,000                 100               2,100
Sales                            \$   36,000        \$      1,500        \$     37,500
Purchase cost                    \$   20,000        \$      1,000        \$     21,000
Variable printing cost          \$     4,000       \$         200        \$      4,200
Total variable cost              \$   24,000        \$      1,200        \$     25,200
Contribution margin              \$   12,000       \$         300        \$     12,300
Fixed cost                      \$     8,000           \$        -       \$      8,000
Operating income                \$     4,000       \$         300        \$      4,300

PROBLEM 5
Required No. 1
Solution

Assume they outsource:
Costs (30,000 x 12 )                                               \$    360,000
Less cost savings:
Variable manufacturing costs (\$3 + \$4 + \$5) x 30,000            \$    360,000
Fixed overhead saved (\$1.5 x 60,000 units)                         \$       90,000
Net cost savings                                                   \$       90,000
Required No. 2
Solution

If they outsource, their costs are:
(30,000 x \$12) + \$4.50 x 60,000       \$    630,000
If they accept the special order:
Net revenue                           \$    230,000
Cost for order                        \$    840,000
Net cost of the special order         \$    610,000

The special order makes them better off by \$20,000.

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