LSU Simple Accounting Variable Cost Worksheet
Description
1. Crane Corp. has collected the following data concerning its maintenance costs for the past 6 months.
| Units Produced |
Total Cost |
|||||||
|---|---|---|---|---|---|---|---|---|
| July | 18,720 | $37,440 | ||||||
| August | 33,280 | 49,920 | ||||||
| September | 37,440 | 57,200 | ||||||
| October | 22,880 | 39,520 | ||||||
| November | 41,600 | 77,480 | ||||||
| December | 39,520 | 64,480 |
Compute the variable cost per unit using the high-low method. (Round answer to 2 decimal places, e.g. 2.25.)
2. Sandhill Corporation has fixed costs of $470,400. It has a unit selling price of $4, unit variable cost of $2.40, and a target net income of $1,470,000.
Compute the required sales in UNITS to achieve its target net income.
3. Carla Vista provides environmentally friendly lawn services for homeowners. Its operating costs are as follows.
| Depreciation | $1,500 | per month | |
| Advertising | $200 | per month | |
| Insurance | $1,660 | per month | |
| $22 | per lawn | ||
| Direct labor | $8 | per lawn | |
| Fuel | $2 | per lawn |
Carla Vista charges $64per treatment for the average single-family lawn.
Determine the companys break-even point in number of lawns serviced per month.
4. In the month of March, Pharoah Salon services 630 clients at an average price of $100. During the month, fixed costs were $14,880 and variable costs were 68% of sales. Determine the total contribution margin in dollars, the per unit contribution margin, and the contribution margin ratio.
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