Acc561 Introduction to Management Accounting: Week 4 Exercises (BE18-1, BE18-7, BE18-11, E19-2)

Acc561 Introduction to Management Accounting
Week 4 Individual Assignment Exercise (BE18-1, BE18-7, BE18-11, E19-2)

BE18-1
Monthly production costs in Pesavento Company for two levels of production are as follows.
Cost 2,000 Units 4,000 Units
Indirect Labor 10,000 20,000
Supervisor Salaries 5,000 5,000
Maintenance 4,000 7,000

Indicate which costs are variable, fixed, and mixed, and give reason for each answer.

BE18-7
Bruno Manufacturing Inc. has sales of $2,200,000 for the first quarter of 2010. In making the sales, the company incurred the following costs and expenses.
Variable Fixed
Cost of goods sold 920,000 440,000
Selling expenses 70,000 45,000
Administrative expenses 86,000 98,000
Complete the CVP income statement for the quarter ended March 31, 2010.

BE18-11
For Dousmann Company actual sales are $1,200,000 and break-even sales are $840,000.
Compute the following (a) the margin of safety in dollars and (b) the margin of safety ratio.

E19-2
In the month of June, Angela's Beauty Salon gave 3,500 haircuts, shampoos, and permanents at an average price of $30. During the month, fixed costs were $16,800 and variable costs were 80% of sales.

Instructions
1. Determine the contribution margin in dollars, per unit, and as a ratio.
2. Using the contribution margin technique, compute the break-even point in dollars and in units.
3. Margin of safety in dollars and ratio.
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