Question

Sunland Corp. had total variable costs of $193,800, total fixed costs of $133,300, and total revenues...

Sunland Corp. had total variable costs of $193,800, total fixed costs of $133,300, and total revenues of $340,000.

Compute the required sales in dollars to break even.

Required sales $

Amanda Company reports the following total costs at two levels of production.

Classify each cost as variable, fixed, or mixed.

5,000 Units

10,000 Units
Indirect labor $ 3,000 $ 6,000

Fixed CostsMixed CostsVariable Costs
Property taxes 7,000 7,000

Fixed CostsMixed CostsVariable Costs
Direct labor 28,000 56,000

Fixed CostsMixed CostsVariable Costs
Direct materials 22,000 44,000

Fixed CostsMixed CostsVariable Costs
Depreciation 4,000 4,000

Fixed CostsMixed CostsVariable Costs
Utilities 5,000 8,000

Fixed CostsMixed CostsVariable Costs
Maintenance 9,000 11,000

Fixed CostsMixed CostsVariable Costs
Business   Accounting   
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Homework Answers

Answer #1

1. contribution = revenues - variable costs

=>$340,000-193,800

=>$146,200.

contribution margin ratio = contribution / sales

=>$146,200/340,000

=>0.43.

sales in dollars to break even = fixed costs / contribution margin ratio

=>$133,300/0.43

=>$310,000.

second part;

indirect labor variable cost
property tax fixed
direct labor variable
direct material variable
depreciation fixed
utilities mixed
maintenance mixed

working

here units double from 5000 unit to 10,000

so a cost which doubles is variable cost

a cost which remains same is fixed cost

a cost which increases but does not double is a mixed cost.

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