Question

The following information is available for a company’s maintenance cost over the last twelve months:

Month	Maintenance Hours	Maintenance Cost
January	43	$43,820
February	38	$45,010
March	35	$44,000
April	31	$45,000
May	36	$43,200
June	28	$38,760
July	18	$32,300
August	19	$35,440
September	25	$37,500
October	29	$39,560
November	34	$42,100
December	39	$46,700

Based on the high-low method, what is the variable and fixed cost component of total maintenance cost?

Variable cost per unit: $

Fixed cost: $

QUESTION 3

The StarCoins Manufacturing Company manufactures a single product that sells for $101 per unit and whose total variable costs are $67 per unit. The company’s annual fixed costs are $320,800.

What is the contribution margin per unit? Round to the nearest cent (2 decimal places)

What is the contribution margin ratio? Make sure to include the percentage (%) sign in your answer and round to 2 decimal places.

What is the break-even point in units? Round to the nearest whole unit (no decimals)

What is the break-even point in sales dollars? Round to the nearest cent (2 decimal places)

QUESTION 4

The StarCoins Manufacturing Company manufactures a single product that sells for $101 per unit and whose total variable costs are $67 per unit. The company’s annual fixed costs are $320,800. Furthermore, management wants to reach a target annual pre-tax income of $560,000. In this case, assume the fixed costs remain at $320,800.

What is the units needed to reach this target income? Round to the nearest whole unit (no decimals)

What is the sales dollars needed to reach this target income? Round to the nearest cent (2 decimal places)

Answer 1