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Assignment II Managerial Accounting | Complete Solution
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Problem - I — (20 Puntos)

Reavis Company prepared the following income statement for 2012:

 

REAVIS COMPANY

Income Statement

For the Year Ended December 31, 2012

_____________________________________________________________________________

Sales (20,000 units) .............................................................................................             $600,000

Variable expenses ...............................................................................................               360,000

Contribution margin ............................................................................................               240,000

Fixed expenses ....................................................................................................               180,000

Net income ..........................................................................................................             $  60,000

 

Instructions

Answer the following independent questions and show computations to support your answers.

  1. What is the company's break-even point in units?

Cuál es el  punto de empate en unidades?

  1. How many more units would the company have had to sell to earn net income of $90,000 in 2012?

Cuántas unidades adicionales tiene que vender la compañía para obtener una ganancia de $90,000 en el 2012?

  1. If the company expects a 25% increase in sales volume in 2013, what would be the expected net income in 2013?

Si la compañia espera un aumento de 25% en el volumen de ventas en el 2013, cuál sería la ganancia esperada para el 2013?

  1. How much sales dollars would the company have to generate in order to earn a target net income of $110,000 in 2013?

Cuántas ventas en dólares tiene que generar la compañía para obtener una ganancia de $110,000 en el 2013?

 

 

Problem I – Solution — Cost-Volume-Profit (20 Puntos)

1

 

 

 

 

 

 

 

2

 

 

 

 

 

 

 

4

 

 

 

 

 

 

 

 

 

 

 

5

 

 

 

 

 

 

 

 

 

 

Problem II (20 Puntos)

 

ROMALY Company bottles and distributes Frapes, a flavored summer beverage. The beverage is sold for $1.50 per 8-ounce bottle to retailers. Management estimates the following revenues and costs at 100% of capacity.
 

Net sales

$3,150,000

Selling expenses-variable

$110,000

Direct materials

600,000

Selling expenses-fixed

90,000

Direct labor

500,000

Administrative expenses-variable

100,000

Manufacturing overhead-variable

580,000

Administrative expenses-fixed

80,000

Manufacturing overhead-fixed

310,000

 

 

 

Instructions

  1. How much is net income for the year using the CVP approach?

Cuánto es la ganancia neta para el año usando el formato de CVP?

  1. How much is the contribution margin ratio?

Cuánto es el % de Margen de Contribución?

  1. Compute the break-even point units and dollars.

Compute el punto de empate en unidades y en dólares?

 

 

Solution to Problem II - ROMALY Company (20 Puntos)

A

VARIABLE COSTING INCOME STATEMENT

Dollars

Per Unit

 

$

$

 

 

 

 

$

$

 

 

 

 

$

 

 

B

BEP in units:

 

 

 

BEP in dollars:

 

 

 

 

C

Contribution Margin Ratio:

 

 

 

 

Problem III (20 Puntos)

MACARY Music, Inc. produces a hip-hop CD that is sold for $15. The contribution margin ratio is 30%. Fixed expenses total $6,750.

 

Instructions

A.    Compute the variable cost per unit.

        Compute el costo variable por unidad?

B.    Compute how many CDs that MARCARIE will have to sell in order to break even.

       Compute cuántas unidades de CDs MARCARIE tiene que vender para salir empate (sin ganancias ni pérdidas)?

  1. Compute how many CDs that MARCARIE will have to sell in order to make a target net income of $16,200.

Compute cuántos CDs MARCARIE tiene que vender para obtener una ganancia de $16,200?

 

Solution to Problem III - MARCARY Music, Inc.  (20 Puntos)
A.
 
 
B.
 
 
C.
 
 

 

 

 

Chapter 6 – Apendice – Absorption and Variable Costing

 

Problem IV - Ex. 102 (20 Puntos)

Momentum Bikes manufactures a basic road bicycle. Production and sales data for the most recent year are as follows (no beginning inventory):

 

            Variable production costs                               $90 per bike

            Fixed production costs                                               $450,000

            Variable selling & administrative costs                       $22 per bike

            Fixed selling & administrative costs               $500,000

            Selling price                                                    $200 per bike

            Production                                                      20,000 bikes

            Sales                                                                17,000 bikes

 

Instructions

  1. Prepare a brief income statement using variable costing.

Prepare un Estado de Ingresos simple usando el formato de costo variable?

 

Solution Problema IV - Ex. 102            (20 Puntos) 

a. Income Statement variable costing.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Problema - V – Incremental Analysis (20 Points)

 

Anheiser has three divisions:  Bud, Wise, and Er. The results of May, 2010 are presented below:                

 

Bud

Wise

Er

Total

Units sold

3,000

5,000

2,000

10,000

Revenue

$70,000

$50,000

$40,000

$160,000

Less variable costs

32,000

26,000

16,000

    74,000

Less direct fixed costs

14,000

19,000

12,000

    45,000

Less allocated fixed costs

    6,000

 10,000

   4,000

    20,000

Net income

$18,000

($5,000)

$ 8,000

$21,000

All of the allocated costs will continue even if a division is discontinued. Anheiser allocates indirect fixed costs based on the number of units to be sold. Since the Wise division has a net loss, Anheiser feels that it should be discontinued. Anheiser feels if the division is closed, that sales at the Bud division will increase by 20%, and that sales at the Er division will stay the same.

 

Instructions

  1. Prepare an analysis showing the effect of discontinuing the Wise division.

Prepare un análisis demostrando el efecto de descontinuar la división Wise.

 

  1. Should Anheiser close the Wise division? Briefly indicate why or why not.

Debe Anheiser cerrar la division Wise? Explique brevemente porqué o porqué no.

 

Problem - V – Incremental Analysis (20 Points)

 

A.

Bud

Wise

Er

Total

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

Calculations:

  Revenue =

  Variable costs =

  Allocation of total allocated fixed costs:

    To Bud =

    To Er =

 

B.

 

 

 

 

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Assignment II Managerial Accounting | Complete Solution
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= 180000 / (240000/20000) = 15000 units Break even with profit of 90000 = Fixed cost + target income / contribution ma...
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