Parallel Parking Driving School charges $500 per student to prepare and administer written and driving tests. Variable costs of $150 per student include trainers' wages, study materials, and gasoline. Annual fixed costs of $140,000 include the training facility and fleet of cars. Read the requirements. Requirement 1. For each of the following independent situations, calculate the contribution margin per unit and the breakeven point in units: Begin by showing the formula for contribution margin per unit and then enter the amounts to calculate the contribution margin per unit for each situation. (Abbreviation used: CM contribution margin.) Requirements 1. For each of the following independent situations, calculate the contribution margin per unit and the breakeven point in units by first referring to the original data provided: a. Breakeven point with no change in information. b. Decrease sales price to $250 per student. c. Decrease variable costs to $100 per student. CM per unit X

Parallel Parking Driving School charges $500 per student to prepare and administer written and driving tests. Variable costs of $150 per student include trainers' wages, study materials, and gasoline. Annual fixed costs of $140,000 include the training facility and fleet of cars. Read the requirements. Requirement 1. For each of the following independent situations, calculate the contribution margin per unit and the breakeven point in units: Begin by showing the formula for contribution margin per unit and then enter the amounts to calculate the contribution margin per unit for each situation. (Abbreviation used: CM contribution margin.) Requirements 1. For each of the following independent situations, calculate the contribution margin per unit and the breakeven point in units by first referring to the original data provided: a. Breakeven point with no change in information. b. Decrease sales price to $250 per student. c. Decrease variable costs to $100 per student. CM per unit X

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Golden Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Vancouver Air. Golden's fixed costs are $25,500 per month. Vancouver Air charges passengers $1,400 per round-trip ticket. Read the requirement. Begin by selecting the formula to calculate the breakeven points. Breakeven Requirement number of units Fixed costs Contribution margin per unit Next, select the formula to calculate the number of tickets needed to meet the target operating income. Calculate the number of tickets Golden must sell each month to (a) break even and (b) make a target operating income of $15,000 per month in each of the following independent cases. (Round up to the nearest whole number. For example, 10.2 should be rounded up to 11.) Quantity of units required to be sold = ( Fixed costs Target operating income ) + Contribution margin per unit + 1. Golden's variable costs are $40 per ticket. Vancouver Air pays Golden 10% commission on ticket price. 2. Golden's variable…
Jolly Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Bolton Air. Jolly's fixed costs are $25,500 per month. Bolton Air charges passengers $1,300 per round-trip ticket. Read the requirement LOADING... . Begin by selecting the formula to calculate the breakeven points. Breakeven number of units = Fixed costs ÷ Contribution margin per unit Next, select the formula to calculate the number of tickets needed to meet the target operating income. Quantity of units required to be sold = ( Fixed costs + Target operating income ) ÷ Contribution margin per unit Now complete the requirement for each of the cases. Begin with case 1. Case 1: Jolly's variable costs are $44 per ticket. Bolton Air pays Jolly 6% commission on ticket price. Jolly must sell tickets to break even and…
Using sensitivity analysis Mi Tierra Driving School charges $680 per student to prepare and administer written and driving tests. Variables costs of $408 per student include trainers’ wages, study materials, and gasoline. Annual fixed costs of $63,920 include the training facility and fleet of cars. Requirements For each of the following independent situations, calculate the contribution margin per unit and the breakeven point in units by first referring to the original data provided: Breakeven point with no change in information. Decrease sales price to $544 per student. Decrease variable costs to $340 per strident Decrease fixed costs to $53,040. 2. Compare the impact of changes in the sales price, variable costs and fixed costs on the contribution margin per unit and the breakeven point in units.
Imagine you are taking 3 classes (Economics, English and Wellness) this semester and want to calculate your total cost per course. Assume only two costs: Tuition and Internet. Tuition, a direct cost, is $1,000 per course. Internet is a shared (overhead) cost and is $450 per semester. Assume you spend 60% of your time online for Economics, 30% for English and 10% for Wellness. Provide the following information: 1. Cost for Economics when overhead is allocated by the number of courses you are taking 2. Cost for Economics when overhead is allocated by time spent online 3. Cost for Wellness when overhead is allocated by the number of courses you are taking 4. Cost for Wellness when overhead is allocated by time spent online
Jolly Travel Agency specializes in flights between Toronto and Jamaica. It books passengers on Ottawa Air. Jolly's fixed costs are $28,500 per month. Ottawa Air charges passengers $1,100 per round-trip ticket. Read the requirement. Begin by selecting the formula to calculate the breakeven points. Breakeven number of units Fixed costs Contribution margin per unit = Next, select the formula to calculate the number of tickets needed to meet the target operating income. Quantity of units required to be sold = ( Fixed costs Target operating income ) ÷ Contribution margin per unit + Now complete the requirement for each of the cases. Begin with case 1. Case 1: Jolly's variable costs are $36 per ticket. Ottawa Air pays Jolly 6% commission on ticket price. Jolly must sell tickets to break even and tickets to meet the target operating income. Case 2: Jolly's variable costs are $28 per ticket. Ottawa Air pays Jolly 6% commission on ticket price. Jolly must sell tickets to break even and tickets…
The actual and planned data for Broadwater Institute & Technical School for the Fall term were as follows: Enrollment Tuition per credit hour Credit hours cost. Line Item Description Revenue Variable costs: Registration, records, and marketing costs per enrolled student Instructional costs per credit hour Depreciation on classrooms and equipment $1,875,000 Registration, records, and marketing costs vary by the number of enrolled students, while instructional costs vary by the number of credit hours. Depreciation is a fixed Registration, records, and marketing costs $ Instructional costs Total variable costs Amount Contribution margin Depreciation on classrooms and equipment Operating income Actual Prepare a variable costing income statement showing the contribution margin and operating income for the Fall term. Broadwater Institute & Technical School Variable Costing Income Statement For the Fall Term 5,000 $115 $ $ 80,000 $300 $45 Planned 4,500 $100 72,000 $300 $40 $1,875,000
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Bethany Link delivers parts for several local auto parts stores. She charges clients $1.73 per mile driven. She has determined that if she drives 1,400 miles in a month, her average operating cost is $1.53 per mile. If Bethany drives 2,800 miles in a month, her average operating cost is $0.90 per mile. Required: 1. Using the high-low method, determine Bethany's variable and fixed operating cost components. 2. Complete the contribution margin income statement for the business last month, when Bethany drove 1,540 miles. (Assume this falls within the relevant range of operations). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the high-low method, determine Bethany's variable and fixed operating cost components. (Round your cost per unit answer to 2 decimal places.)
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Bethany Liang delivers parts for several local auto parts stores. She charges clients $3.28 per mile driven. She has determined that if she drives 2,700 miles in a month, her average operating cost is $3.08 per mile. If Bethany drives 5,400 miles in a month, her average operating cost is $2.20 per mile. Required: 1. Using the high-low method, determine Bethany's variable and fixed operating cost components. 2. Complete the contribution margin income statement for the business last month, when Bethany drove 2,970 miles. (Assume this falls within the relevant range of operations). Complete this question by entering your answers in the tabs below. Required 1 Required 2 Using the high-low method, determine Bethany's variable and fixed operating cost components. Note: Round your cost per mile answer to 2 decimal places. Variable cost per mile driven Fixed cost $ 0.01