ACC 561 Week 4 IndividualWileyPlus Exercise

Topics: Variable cost, Costs, Cost Pages: 3 (322 words) Published: October 26, 2014

This paperwork ACC 561 Week 4 IndividualWileyPlus Exercise BE18 1, BE18 7, BE18 11 includes answers to these exercises:

1) Brief Exercise BE18-1

Monthly production costs in Pesavento Company for two levels of production are as follows.

Cost 3,000 units 6,000 units

Indirect labor $10,000 $20,000

Supervisory salaries 5,000 5,000

Maintenance 4,000 7,000

Indicate which costs are variable, fixed, and mixed.

Indirect labor Variable cost

Supervisory salaries Fixed cost

Maintenance Mixed cost

2) Brief Exercise BE18-7

Bruno Manufacturing Inc. has sales of $2,200,000 for the first quarter of 2010. In making the sales, the company incurred the following costs and expenses.

Variable Fixed

Cost of goods sold $920,000 $440,000

Selling expenses 70,000 45,000

Administrative expenses 86,000 98,000

Complete the CVP income statement for the quarter ended March 31, 2010.


CVP Income Statement

For the Quarter Ended March 31, 2010

Sales $2,200,000

Variable costs 1,076,000

Contribution Margin 1,124,000

Fixed costs 583,000

Net income $541,000

3) Brief Exercise BE18-11

For Dousmann Company actual sales are $1,200,000 and break-even sales are $840,000. Compute the following (a) the margin of safety in dollars and (b) the margin of safety ratio.

Margin of safety in dollars $360,000

Margin of safety ratio 30%

Economics - General Economics



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