cost volume profit cvp analysis 2

Complete the following three questions using Microsoft Excel. No other submission format is allowed. Review the grading rubric to confirm you are meeting the assignment requirements.

Problem 1

Maintenance Maintenance
Hours Cost (SAR)
January 1,000 45,550
February 1,500 52,000
March 2,100 61,500
April 1,800 57,500
May 800 42,000
June 1,100 47,000
  1. Calculate variable cost per unit using the high-low method.
  2. Calculate fixed costs.

Problem 2

Total Per Unit Percent of Sales
Sales (40,000 units) 2,400,000 60 100%
Variable expenses 1,600,000 40 ? %
Contribution margin 800,000 ? %
Fixed expenses 500,000
Net operating income 300,000
  1. Calculate variable expense ratio.
  2. Calculate contribution margin ratio.
  3. Calculate break even sales in units (show your work).
  4. Calculate break even sales in Dollars.
  5. How many units must be sold to make a profit of SAR 200,000.

Management is considering increasing quality of its units by spending SAR 3 more per unit in variable costs and adding a quality inspector for an additional SAR 60,000 annual fixed cost. Management believes this change will increase unit sales by 10% at the same price.

  1. Calculate the new operating profit or loss.
  2. Should management make the changes?

Problem 3

GIVEN: Janitorial

Dept.

Cafeteria

Dept.

Mixing

Dept.

Baking

Dept.

Square feet 100 200 1500 3000
Employee count 20 30 80 100
Department cost (SAR) 100,000 150,000 400,000 500,000

Required:

Allocate Janitorial and Cafeteria department costs to mixing and baking departments using the direct method. Use square feet for allocating janitorial costs and number of employees for allocating cafeteria department costs.

You must show all your work.

 
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