Reference no: EM132004008

Questions -  

1. Miller Metal Co. makes a single product that sells for $40.5 per unit. Variable costs are $26.2 per unit, and fixed costs total $65,975 per month.

Required:

a. Calculate the number of units that must be sold each month for the firm to break even. (Do not round your intermediate calculations.)

b. Assume current sales are $405,000. Calculate the margin of safety and the margin of safety ratio.

2. A department of AIpha Co. incurred the following costs for the month of September. Variable cost, and the variable portion of mixed cost, are a function of the number of units of activity:

Activity level in units 4,500

Variables costs 9,900

Fixed cost

31,000

Mixed costs 16,220

Total costs $57,120

During October the activity level was 9,400 units, and the total costs incurred were $69,500.

Required:

a. Calculate the variable costs, fixed costs, and mixed costs incurred during October. (Do not round Intermediate calculations.)

b. Use the high-low method to calculate the cost formula for mixed cost. (Do not round intermediate calculations and round your answers to two decimal places.)