Question

Exercise 6-14 Missing Data; Basic CVP Concepts [LO1, LO9]Fill in the missing amounts in each of the eight case situations below. Each case is independent of the others. (Hint: One way to find the missing amounts would be to prepare a contribution format income statement for each case, enter the known data, and then compute the missing items.) 1 Assume that only one product is being sold in each of the four following case situations: (Input all amounts as positive values except for Net operating loss which should be indicated by a minus sign. Omit the "$" sign in your response.) Case UnitsSold Sales VariableExpenses ContributionMarginper Unit FixedExpenses Net OperatingIncome(Loss)1 15,000 $180,000 $120,000 $4 $50,000 $ 2 4,000$100,000 $ 60,000$10 $32,000 $8,000 3 10,000 $ $70,000 $13 $ $12,000 4 6,000 $300,000 $ 210,000$15 $100,000 $(10,000) 1A Assume that more than one product is being sold in each of the four following case situations: (Input all amounts as positive values except for Net operating loss which should be indicated by a minus sign. Omit the "$" sign in your response.) Case Sales VariableExpenses AverageContributionMarginRatio FixedExpenses Net OperatingIncome(Loss)1 $500,000 $ 20% $ $7,000 2 $400,000 $260,000 35% $100,000 $ 40,000 3 $ $ 60% $130,000 $20,000 4 $600,000 $420,000 % $ $(5,000) I filled some of data in but I dont know how to get the rest, could someone please explain to me how to get the missing data, thanks.

Answer 1

case 1 net income $ 10,000

case 3 revenue $ 200,000

-------

second round

case 1

variable $ 400,000

fixed $ 93,000

case 3

revenue $ 250,000

variable expense $ 100,000

case 4

average CMR 0.30

fixed cost $ 185,000

Step-by-step explanation:

Case Units Revenue Variable Unit CM Fixed Net Income

1 15,000 $180,000 $120,000 $ 4 $50,000 $10,000(A)

3 10,000 $200,000 (B) $ 70,000 $13 $118,000 $12,000

(A) revenue - variable cost - fixed = income

180,000 - 120,000 - 50,000 = 10,000

(B) units x contribution per unit + variable cost

10,000 x $13 + $70,000 = $ 200,000

Second Round:

Case Sales Variable Avg CMR Fixed Income

1 $ 500,000 $ 400,000(C) 0.20 $93,000(D) $ 7,000

3 $ 250,000(E) $ 100,000(F) 0.60 $130,000 $ 20,000

4 $600,000 $ 420,000 0.30(G) $ 185,000(H) $ (5,000)

(C) Sales x (1 - CMR) = Variable cost

500,000 x (1 - 0.2) = 400,000

(D) contribution - fixed = operating income

100,000 - fixed = 7,000

fixed = 93,000

(E)

fixed expense + income = contribution

130,000 + 20,000 = 150,000

sales x CMR = contribution

sales = contribution / CMR = 150,000 / 0.6 = 250,000

(F) variable:

(F)Sales x (1 - CMR) = Variable cost

250,000 ( 1 - 0.6) = 100,000

(G)

( sales - variable ) / sales = CMR

( 600,000 - 420,000 ) / 600,000 = 0.30

(H)

sales - variable -- fixed = income

600,000 - 480,000 - fixed = -5,000

fixed = 180,000 + 5,000 = 185,000