Cost Behavior, CVP Relationships | StudyDaddy.com

 Assignment Description

With the help of your CFO, you have put together the following preliminary budget figures based on last year’s numbers for a planned production and sales level of 4,000 units per year:

Building depreciation

$200,000/yr.

Machine operators

$100,000/yr.

Management staff

$400,000/yr.

Direct materials

$4,000,000/yr.

Other expenses that seem to vary based on production levels

$3,000,000/yr.

Other expenses that don’t seem to vary

$1,300,000/yr.

Selling price per unit

$5,000/unit

Utilities:

This category is difficult to analyze; a part of it is related to the building’s heat and light, whereas a part of it is used in the manufacturing process itself. You have the following data to which you will apply the high-low method:

  • When there is no production, utility costs are $20,000/month
  • When production levels reached 4,000 units/month, utility costs totaled $40,000/month

You are planning for the future and working on a report based on data from last year’s actual performance. You are going to use the breakeven formula to determine the businesses breakeven point and to answer some important questions regarding your data.

Using only the data from last year’s actual performance write a report answering the following questions:

  1. Which of these 8 cost categories would be considered variable, and which fixed, and explain why?
  2. Which costs would be considered mixed (i.e., semi-variable or semi-fixed)?
  3. Ignoring utility costs altogether, compute the contribution margin per unit, in dollars and in percentage and the breakeven level of sales?
  4. Ignoring utility costs altogether, if instead of breaking even, the firm wants to make $10,000/month profit, answer the following:
    • How many units must be sold each month?
    • To how many sales dollars is this unit volume equivalent?
  5. In year 2, the CEO plans to add $300,000/yr. expense in added administrative salaried headcount. Ignoring utility costs altogether, how many additional units must be sold just to pay for this added expense?

Show ALL calculations.

Must be completed as 1 single excel worksheet

Show more







Calculate Your Essay Price
(550 words)

Approximate price: $22

Calculate the price of your order

550 words
We'll send you the first draft for approval by September 11, 2018 at 10:52 AM
Total price:
$26
The price is based on these factors:
Academic level
Number of pages
Urgency
Basic features
  • Free title page and bibliography
  • Unlimited revisions
  • Plagiarism-free guarantee
  • Money-back guarantee
  • 24/7 support
On-demand options
  • Writer’s samples
  • Part-by-part delivery
  • Overnight delivery
  • Copies of used sources
  • Expert Proofreading
Paper format
  • 275 words per page
  • 12 pt Arial/Times New Roman
  • Double line spacing
  • Any citation style (APA, MLA, Chicago/Turabian, Harvard)

Our guarantees

Delivering a high-quality product at a reasonable price is not enough anymore.
That’s why we have developed 5 beneficial guarantees that will make your experience with our service enjoyable, easy, and safe.

Money-back guarantee

You have to be 100% sure of the quality of your product to give a money-back guarantee. This describes us perfectly. Make sure that this guarantee is totally transparent.

Read more

Zero-plagiarism guarantee

Each paper is composed from scratch, according to your instructions. It is then checked by our plagiarism-detection software. There is no gap where plagiarism could squeeze in.

Read more

Free-revision policy

Thanks to our free revisions, there is no way for you to be unsatisfied. We will work on your paper until you are completely happy with the result.

Read more

Privacy policy

Your email is safe, as we store it according to international data protection rules. Your bank details are secure, as we use only reliable payment systems.

Read more

Fair-cooperation guarantee

By sending us your money, you buy the service we provide. Check out our terms and conditions if you prefer business talks to be laid out in official language.

Read more

Order your essay today and save 10% with the coupon code: best10