Assignment II Managerial Accounting Complete Solution

Question: #1899

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.

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

Cuál es el punto de empate en unidades?

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?

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?

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

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?

How much is the contribution margin ratio?

Cuánto es el % de Margen de Contribución?

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)?

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

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