ACTIVITY 2 POST ETST SOLUTION
1. The solution using Microsoft Excel functions is:
slope = $77.50 per tree
intercept = $1,655 per month
2.The solution using Microsoft Excel functions is:
slope = $24.08 per unit
intercept = $5,709 per month
3.The solution using Microsoft Excel functions is:
slope = $6.50 per activity unit
intercept = $97.00 per period
4. Sales...............................................................$450,000
Cost of goods sold($450,000 − $170,000...
280,000
Gross margin($140,000 + $30,000 ...............170,000
Selling and administrative expenses ..............140,000
Net operating income.................................... $30,000
Since the gross margin is $90,000 less than the contribution margin, the contribution
margin is $ 170,000 + $90,000, or $260,000.
Sales................................................................ $450,000
Variable expenses($450,000 − $260,000)...... 190,000
Contribution margin ........................................ 260,000
Fixed expenses($260,000 − $30,000) ............ 230,000
Net operating income ......................................$30,000
5. The solution using Microsoft Excel functions is:
slope = $7.37 per machine-hour
intercept = $65,670 per month
6. Variable component of cost of goods sold:
Variable cost = Change in costs/Change in units
Variable cost = ($582,400 −$499,200)/(7,000 −6,000)
Variable cost = $83.20
Fixed cost: High volume: $582,400 −$83.20 × 7,000 = $0
Low volume: $499,200 −$83.20 × 6,000 = $0
Variable component of selling and administrative expenses:
Variable cost = Change in costs/Change in units
Variable cost = ($303,800 −$285,600)/(7,000 −6,000)
Variable cost = $18.20
Fixed cost: High volume: $303,800 −$18.20 × 7,000 = $176,400
Low volume: $285,600 −$18.20 × 6,000 = $176,400
Total variable cost per unit:$83.20 + $18.20 = $101.40
Total fixed cost:$0 + $176,400 = $176,400
7. Sales..........................................................................$250,000
Variable cost of goods sold.......................................$110,000
Variable selling and administrative expenses...........?
?
Contribution margin..................................................$100,000
8. Fixed cost:
High volume: $303,800 −$18.20 × 7,000 = $176,400
Low volume: $285,600 −$18.20 × 6,000 = $176,400
Total variable cost per unit:$83.20 + $18.20 = $101.40
9. . Fixed cost:
High volume: $303,800 −$18.20 × 7,000 = $176,400
Low volume: $285,600 −$18.20 × 6,000 = $176,400
Total variable cost per unit:$83.20 + $18.20 = $101.40
Total fixed cost:
$0 + $176,400 = $176,400
10. Partial traditional income statement:
Gross margin.............................................$?
Less selling and administrative expenses..55,000
Net operating income ................................$20,000