Total Per Unit Percent

Units $5,625.00
Sales $4.00
-Variable expenses $2.40
=Contribution Margin 9000 $1.60
-Fixed expenses 9000
=Operating Income 0

Before
Total Per Unit Percent
Units $7,750.00
Sales $ 31,000.00 $4.00
-Variable expenses $2.20
=Contribution Margin $12,400.00 $1.60 10%
-Fixed expenses 9000
=Operating Income 3400

Sales Mix: The relative proportion in which products are sold (units).

Gen Admin Box Seats

SP $ 16.00 $ 20.00
VC $ 10.00 $ 10.00
Sales Mix 90% 10%

Gen Admin Box Seats

Total Per Unit Total Per Unit
Sales Mix 80% 20%
Units 6400 1600
Sales $16.00 $ 20.00
-Variable expenses $10.00 $ 10.00
=Contribution Margin $38,400.00 $6.00 $ 16,000.00 $ 10.00
-Fixed expenses xxxxxx xxxxxx xxxxxxx xxxxxx
=Operating Income xxxxxx xxxxxx xxxxxxx xxxxxx

90% $ 6.00 10% $ 10.00

Total Per Unit Total Per Unit

Sales Mix 90% 10%
Units 6750 750
Sales $16.00 $ 20.00
-Variable expenses $10.00 $ 10.00
=Contribution Margin $40,500.00 $6.00 $ 7,500.00 $ 10.00
-Fixed expenses xxxxxx xxxxxx xxxxxxx xxxxxx
=Operating Income xxxxxx xxxxxx xxxxxxx xxxxxx

Income Taxes
Total per unit percent
Sales Mix 20,000
Units
Sales $ 25 100%
-Variable expenses $ 15 60%
=Contribution Margin 200,000 $ 10 40%
-Fixed expenses 150,000
=Operating Income 50,000 100%
-Income taxes 20,000 40%
=Net Income 30,000 60%

Chapter 6

Semivariable cost: A cost that contains both a variable component and a fixed component.

Fixed Variable Volume Total Cost

Direct materials 1.10 110,000 121,000
Direct labor 0.3 110000 33000
Overhead:
Facilities cost 200000 200000
Indirect labor 25000 0 - 50000
Indirect labor 35000 50000 - 100000
Indirect labor 45000 10000 - 150000 45000
Delivery trucks 3000 0.1 110000 14000
Utilities 1500 0.05 110000 7000
420,000

High-low method
Volume Cost
High 118000 7035
Low 75000 5100
Dif 43000 1935 <<<Additional Variable cost

Variable cost per dz dountes 0.045

 TC = FC +
Low 5100 1725
High 7035 1725

Estimate Utilities cost in month in which we produce and sell 80,000 dz donuts
TC = FC +
5325 1725
5650
0.9424778761
Is the above estimate a good prediction?
Yes
 After
Total Per Unit
Units $8,525.00
Sales
-Variable expenses 4,00
=Contribution Ma 11594.00 $2.64
-Fixed expenses 7480.00 $1.36
=Operating Incom 4114.00

Total
Total Per Unit

8000

$54,400.00 $ 6.80
$48,000.00
$6,400.00

$ 6.40 <Weighted Average CM/Unit at this sales mix

Total Per Unit

7500

$48,000.00 $ 6.40
$48,000.00
 $0.00

Total
23,333

233,333
150,000
83,333

50,000

Fixed cost disappears

VC
3375
5310
5650 325

VC
3600