Question

Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others.

Required:

a. Assume that only one product is being sold in each of the four following case situations:

b. Assume that more than one product is being sold in each of the four following case situations:

Answer 1

Requirement A:

	Case 1	Case 2	Case 3	Case 4
Units sold	9100	14500	19200	5900
Sales	$                             263,900	$                            391,500	$                  422,400	$                            147,500
Variable expenses	$                             154,700	$                            217,500	$                  211,200	$                               88,500
Fixed expenses	$                               80,000	$                            179,000	$                     77,000	$                               78,000
Net operating income (loss)	$                               29,200	$                               (5,000)	$                  134,200	$                             (19,000)
Contribution margin per unit	$                                       12	$                                      12	$                            11	$                                      10
Calculation Part :
	Case 1	Case 2	Case 3	Case 4
Units sold	9100	(179000-5000)/12	19200	5900
Sales	$                             263,900	$                            391,500	(19200*11)+211200	$                            147,500
Variable expenses	$                             154,700	391500-179000+5000	$                  211,200	147500-(78000-19000)
Fixed expenses	$                               80,000	$                            179,000	(19200*11)-134200	$                               78,000
Net operating income (loss)	263900-154700-80000	$                               (5,000)	$                  134,200	$                             (19,000)
Contribution margin per unit	(263900-154700)/9100	$                                      12	$                            11	(78000-19000)/5900

Requirement B:

	Case 1	Case 2	Case 3	Case 4
Sales	$                         448,000	$                            193,000	$                             699,000	$                            307,000
Variable expenses	$                         255,360	$                            121,590	$                             111,840	$                               98,240
Fixed expenses	$                         111,000	$                               52,000	$                             470,000	$                            234,000
Net operating income (loss)	$                            81,640	$                               19,410	$                             117,160	$                             (25,240)
Contribution margin ratio	43.00%	37.00%	84.00%	68.00%
Calculation part:
	Case 1	Case 2	Case 3	Case 4
Sales	$                         448,000	$                            193,000	(470000+117160)/84%	$                            307,000
Variable expenses	448000-(448000*43%)	$                            121,590	699000-(470000+117160)	$                               98,240
Fixed expenses	(448000*43%)-81640	$                               52,000	$                             470,000	307000-98240+25240
Net operating income (loss)	$                            81,640	193000-121590-52000	$                             117,160	$                             (25,240)
Contribution margin ratio	43.00%	(193000-121590)/193000	84.00%	(307000-98240)/307000