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Chapter 5 Practice Problems

by: Kimberly Portes

20

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5

Chapter 5 Practice Problems ACC 252

Marketplace > Syracuse University > ACC 252 > Chapter 5 Practice Problems
Kimberly Portes
Syracuse
GPA 3.38
Intro to Managerial Accounting (ACC 252)

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Chapter 5 Practice Problems from Introduction to Managerial Accounting Ed.7
COURSE
Intro to Managerial Accounting (ACC 252)
PROF.
TYPE
Class Notes
PAGES
5
WORDS
CONCEPTS
managerial accounting, Chapter 5, breakeven, target profit, operating leverage, contribution margin
KARMA
25 ?

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This 5 page Class Notes was uploaded by Kimberly Portes on Tuesday October 27, 2015. The Class Notes belongs to ACC 252 at Syracuse University taught by Prof. Zadzilka in Fall 2015. Since its upload, it has received 20 views.

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Date Created: 10/27/15
Accounting 252 Section M002 October 26 2015 Part 2 Planning Chapter 5 Cost Behavior amp Cost Volume Pro t Analysis Practice Problems Page 229 E5 13 0 Prepare contribution format income statements under the following conditions 0 Refer to the original income statement in the textbook 1 The number of units increased by 15 Total Per Unit Sales 23000 34500000 1500 Variable Expenses 20700000 900 Contribution Margin 13800000 600 Fixed Expenses 700000 Net Income 6800000 Sales the original amount of units sold was 20000 20000 units 15 3000 3000 20000 23000 23000 units 15 34500000 Variable expenses 23000 units 9 20700000 2 The selling price decreases by 150 per unit and the number of units sold increases by 25 Total Per Unit Sales 25000 33750000 1350 Variable Expenses 22500000 900 Contribution Margin 11250000 600 Fixed Expenses 7000000 Net Income 4250000 Sales the original amount of units sold was 20000 20000 units 25 5000 000 20000 25000 5 23000 units 15 15 33700000 Variable expenses 25000 units 9 22500000 3 The selling price increases by 150 per unit xed expenses increase by 20000 and the number of units sold decreases by 5 Total Per Unit Sales 19000 31350000 1650 Variable Expenses 17100000 900 Contribution Margin 14250000 600 Fixed Expenses 9000000 Net Income 5250000 Sales the original amount of units sold was 20000 20000 units 5 1000 20000 1000 19000 23000 units 15 15 31350000 Variable expenses 19000 units 9 17100000 Fixed Expenses 70000 20000 90000 4 The selling price increases by 12 variable expenses expenses increase 060 per unit and the number of units sold decreases by 10 Total Per Unit Sales 18000 30240000 1680 Variable Expenses 17280000 960 Contribution Margin 12960000 600 Fixed Expenses 7000000 Net Income 5960000 Selling price per unit 15 12 18 15 18 168 Sales the original amount of units sold was 20000 20000 units 10 2000 20000 2000 18000 23000 units 168 30240000 Variable expenses 18000 units 96 17280000 Page 237 E5 30 0 Refer to information in textbook 1 Breakeven point units and sales dollars Contribution margin 24 Total xed expenses 60000 Sales price 40 Breakeven point units 6000024 2500 units Breakeven point sales dollars 2500 units 40 100000 3 How many units must be sold to achieve a target pro t of 18000 Total xed expenses 60000 Target pro t 18000 Contribution margin 24 Units needed to achieve target pro t 60000 18000 24 3250 units 4 Should she convert the part time position to full time o The additional 8000 a xed cost 0 Will the additional 25000 in sales cover the added amount of xed costs The contribution ratio will be needed to solve this Sales price 40 Contribution margin 24 Contribution ratio 2440 60 25000 15000 0 15000 can cover the additional 8000 of xed expenses so she should convert the part time position to full time a Calculate the operating leverage Contribution margin 72000 Net income 12000 Operating leverage 72000 12000 6 b Projected sales increase 50 What is the expected percentage increase in net income Projected increase of sales 50 Operating leverage 6 Expected percentage increase in net income 05 6 3 300 Page 226 E55 0 Refer to information in textbook 1 Should the advertising budget be increased 0 5000 increase in monthly advertising budget 0 Could lead to 9000 increase in sales The contribution ratio will be needed to solve this Sales price 90 Contribution margin 27 Contribution ratio 2790 30 9000 2700 0 2700 can t cover the additional 5000 of xed expenses so the advertising budget shouldn t be increased 2 Should higher quality components be used Increases variable expenses by 2 per unit 0 Could increase sales by 10 Units sold 2000 Current contribution margin 27 27 2000 54000 Projected units sold 2000 10 200 2000 2200 Sales price 90 New variable expense 63 2 65 New contribution margin 90 65 25 25 2200 55000 Higher quality components should be used because 55000 gt 54000

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