Gotcha Covered manufactures and sells leather cases for cell phones. Each case sells for$80. Variable manufacturing costs are $30 per case. We pay a sales commission of 10%of the selling price to our salespeople. Fixed manufacturing costs are $200,000 and fixedoperating costs are $35,000.Calculate the following amounts:a.b.C.ii.iii.iv.V.Target quantity if we want to generate Operating Income = $100,000Neatly draw a CVP Chart. Be sure to label everything relevant.We currently produce and sell 10,000 cases.i.What is our expected Operating Income?How much is our Margin of Safety in units and dollars?Prepare an Income Statement (through Oper Inc) using the GM format.Prepare an Income Statement (through Oper Inc) using the CM format.Our plant manager suggested we purchase a new machine which willlower our labor costs. This change will increase Fixed Costs by $30,000and reduce Variable Cost per Unit by $5. Calculate the new BreakevenQuantity and new expected Operating Income. Should we make thechange? Why or why not?Draw a graph (Total Costs as a function of #Units) of the original costfunction and the proposed cost function. Be sure to label everythingrelevant. What does the number of units at the intersection point of thesetwo lines indicate?11.iii.iv.V.vi.V (variable cost per unit) and VC% (variable cost percentage)CM (contribution margin per unit) and CM% (contribution margin perc.)F (total fixed costs)Breakeven quantity

Gotcha Covered manufactures and sells leather cases for cell phones. Each case sells for $80. Variable manufacturing costs are $30 per case. We pay a sales commission of 10% of the selling price to our salespeople. Fixed manufacturing costs are $200,000 and fixed operating costs are $35,000. Calculate the following amounts: a. i. iii. V (variable cost per unit) and VC % (variable cost percentage) CM (contribution margin per unit) and CM% (contribution margin perc.) F (total fixed costs)

Gotcha Covered manufactures and sells leather cases for cell phones. Each case sells for $80. Variable manufacturing costs are $30 per case. We pay a sales commission of 10% of the selling price to our salespeople. Fixed manufacturing costs are $200,000 and fixed operating costs are $35,000. Calculate the following amounts: a. i. iii. V (variable cost per unit) and VC % (variable cost percentage) CM (contribution margin per unit) and CM% (contribution margin perc.) F (total fixed costs)

Principles of Accounting Volume 2

19th Edition

ISBN:9781947172609

Author:OpenStax

Publisher:OpenStax

Chapter3: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 7EB: Delta Co. sells a product for $150 per unit. The variable cost per unit is $90 and fixed costs are...

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