Reference no: EM131150927

E5-6 PCB Corporation manufactures a single product. Monthly production costs incurred in the manufacturing process are shown below for the production of 3,000 units. The util¬ities and maintenance costs are mixed costs. The fixed portions of these costs are $300 and $200, respectively.

Production in Units	3,000
Production Costs
Direct materials	$ 7,500
Direct labor	18,000
Utilities	2,100
Property taxes	1,000
Indirect labor	4,500
Supervisozy salaries	1,900
Maintenance	1,100
Depreciation	2,400

Instructions

(a) Identify the above costs as variable, fixed, or mixed.

(b) Calculate the expected costs when production is 5,000 units,

E5-9 The Palmer Acres Inn is trying to determine its break-even point during its off-peak season. The inn has 50 rooms that it rents at $60 a night. Operating costs are as follows,

Salaries	$5,900 per month
Utilities	$1,100 per month
Depreciation	$1,000 per month
Maintenance	$100 per month
Maid service	$14 per room
Other costs	$28 per room

Instructions

Determine the inn's break-even point in (a) number of rented rooms per month and (b) dollars.

ES-13 Billings Company has the Following information available for September 2017.

Unit selling puce of video game consoles	$400
Unit variable costs	$280
Total fixed costs	$54,000
Units sold	600

Instructions

(a) Compute the unit contribution margin.
(b) Prepare a CVP income statement that shows both total and per unit amounts.
(c) Compute Billings' break-even point in units.
(d) Prepare a CVP income statement for the break-even point that shows both total and per unit amounts.

P5-2A Jorge company bottles and distributes B-Lite, a diet soft drink. The beverage is sold for 50 cents per I 6-ounce bottle to retailers, who charge customers 75 cents per bottle. For the year 2017, management estimates the following revenues and costs.

Sales	$1,800,000	Selling expenses-variable	$70,000
Direct materials	430,000	Selling expenses-fixed	65,000
Direct labor	360,000	Administrative expenses- variable	20,000
Manufacturing overhead- variable	380,000	Administrative expenses- fixed	60,000
Manufacturing overhead- fixed	2.80,000

Instructions

(a) Prepare a CVP income statement for 2017 based on management's estimates. (Show column for total amounts only.)
(b) Compute the break-even point in (1) units and (2) dollars.
(c) Compute the contribution margin ratio and the margin of safety ratio. (Round to nearest full percent)
(d) Determine the sales dollars required to earn net income of $180,000,

E6-2 In the month of June, Jose Hebert s Beauty Salon gave 4,000 haircuts, shampoos, and permanents at an average price of $30. During the month, fixed costs were $16,800 and variable costs were 75% of sales.

Instructions

(a) Determine the contribution margin in dollars, per unit and as a ratio.
(b) Using the contribution margin technique, compute the break-even point in dollars and in units.
(e) Compute the margin of safety in dollars and as a ratio.

E6-7 PD C) Repairs has 200 auto-maintenance service outlets nationwide. It performs primarily two lines of service: oil changes and brake repair. Oil change-related services represent 70% of its sales and provide a contribution margin ratio of 20%. Brake repair represents 30% of its sales and provides a 40% contribution margin ratio. The company's fixed costs are $15,600,000 (that is, $78,000 per service outlet).

Instructions

(a) Calculate the dollar amount of each type of service that the company must provide in order to break even.
(b) The company has a desired net income of $52,000 par service outlet, What is the dollar amount of each type of service that must be performed by each service outlet to meet its target net income per outlet?

E6-12 Dalton Inc. produces and sells three products. Unit data concerning each product is shoviro below.

	Product
	D	E	F
Selling price	$200	$300	5250
Direct Labor costs	30	80	35
Other variable costs	95	80	145

The company has 2,000 hours of labor available to build inventory in anticipation of the company's peak season. Management is trying to decide which product should be pro¬duced. The direct labor hourly rate is $10.

Instructions

(a) Determine the number of direct labor hours per unit.
(b) Determine the contribution margin per direct labor hour.
(c) Determine which product should be produced and the total contribution margin for that product.

P6-4A: Tanek Indusbies manufactures and sells three different models of wet-dry shop vacuum cleaners. Although the shop vacs vary in terms of quality and features, all al good sellers. Tanek is currently operating at full capacity with limited machine time.
Sales and production information relevant to each model follows,

	Product
	Economy	Standard	Deluxe
Selling price	$30	$50	$100
Variable costs and expenses	$16	$20	$46
Machine hours required	0.5	0.8	1.6

Instrigetions
(a) ignoring the machine time constraint, which single product should Tank Industries produce?
(h) What is the contribution margin per unit of limited resource for each product?
(c) If additional machine time could be obtained, how should the additional time be used? (b) Etonorny 528