Question

1.Waterway Industries has two divisions—Standard and Premium. Each division has hundreds of different types of tennis racquets and tennis products. The following information is available:

	Standard division	Premium division	Total
Sales	$400000	$600000	$1000000
Variable costs	300000	380000
Contribution margin	$100000	$220000
Total fixed costs			$300000

What is the weighted-average contribution margin ratio?

2.Oriole Company’s high and low level of activity last year was 53000 units of product produced in May and 30000 units produced in November. Machine maintenance costs were $200200 in May and $122000 in November. Using the high-low method, determine an estimate of total maintenance cost for a month in which production is expected to be 38000 units.

3.A company is considering the following alternatives: Alternative 1 Alternative 2 Revenues $120,000 $120,000 Variable costs 60,000 70,000 Fixed costs 35,000 35,000 Which of the following are relevant in choosing between the alternatives?

4.Portman Company's activity for the first three months of 2016 are as follows: Machine Hours Electrical Cost January 1300 $4000 February 1800 $5000 March 2100 $5600 Using the high-low method, how much is the cost per machine hour? For Crane Company at a sales level of 4000 units, sales is $65000, variable expenses total $40000, and fixed expenses are $21000. What is the contribution margin per unit?

Answer 1