Solutions for Problems in Chapter 3
Chapter 3: Cost-Volume-Profit Analysis 3-5
Chapter 3
Cost-Volume-Profit Analysis
MULTIPLE CHOICE QUESTIONS
Ans: D
3.17.
Ans: B
3.18.
Ans: C
3.19.
Ans: A
3.20.
Ans: B
EXERCISES
3.21
A. Q = 1,200 gift baskets
B. Q = 74,667 child visits
3.23
A. V = $31
B. F = $4,664
C. Q = 360 units
3.24
A. Profit (loss) before taxes is = $(100,000)
B. S = $5.125
3.26
A. Contribution margin per unit = $80
B. Contribution margin ratio = 73%
C. Breakeven point in units = 250 units
D. S = $47,120
3.27
A. Contribution margin per unit = $36\
B. Contribution margin ratio = 30%
C. Break-even = 2,384 units
D. $336,000 sales
E. increase by 1,575 units
3.28
A. TC = $38,363 + $0.825*appointments
B. Q = 1,587 appointments
3.29
A. Q = 80,000 units
B. TR = $10,000,000
C. TS = $12,000,000
D. Q = 240,000 units
Dollar sales = $12,000,000
3.30
A. Q = 15,000 units
B. Q = 29,000 units
C. Q = 19,125 units
D. Q = 31,625 units
E. S = $28.33
3.31
A. TS = $1,208,333.33
3.32
A. Q = 275,000 boxes
B. S = $4.50
C. Dollar sales = $1,920,000
3.33
A. Breakeven for option 1 = 400 sets
Breakeven for option 2 = 317 sets
Breakeven for option 3 = 0 sets
B. option 1
C. option 3
D. TS = $18,000
3.34
A. ROI = 8.4%
B. TS = 2,410,500€
3.35
A. Q = 136,667 units.
B. 30,000 units, $300,000
C. 3.33
3.36
A. 1,750 kgs., $8,400
B. 2,922 kgs., $14,026
C. $1,200, 12.5%
D. 8.0
3.37
A. Contribution margin $18 per swimsuit
Breakeven in units 42,500 swimsuits
B. 7,500 swimsuits
D. Contribution margin ratio = 0.45
Breakeven in revenues = $1,700,000
E. $300,000
F. $225,000
G. 56,786 swimsuits
3.38
A. $46,760
B. 1,274 dog-days
C. 11,640 dog-days
D. 38.6%
PROBLEMS
3.39
A. TC = $70,000 + $60*Q
B. Q = 1,750 cases
C. $40,000
3.40
B. 5.6 hours per day
C. $53.67
3.41
A. two
B. Regular: $9,804
Premium: $59,808
C. $20,232
D. Breakeven for Regular $ 21,032
Breakeven for Premium $ 86,027
Total corporate sales at breakeven $ 107,059
E. $12,173
3.43
A. Q = 932 units to break even
C. $16,200
E. Q= 905 units
F. Q = 1,100 units
3.44
A. $51,429
B. $791,215
C. 49,561 units sold
3.45
A. Sales = $750,000
Total VC - $525,000
VS&A = $65,000
COGS = $581,250
FMOH = $121,250
FC = $202,500
FS&A = $81,250
B. $835,000; 3,340 units
3.46
A Q = 62,500 kgs
C. SP = $8.60
3.47
A.
2. Contribution margin = $188 per clock
Contribution margin ratio = 0.8356
3. TC = $7,800 + $37*Q
Breakeven in number of clocks = 42 clocks
Breakeven in revenues = $9,335
4. 63 clocks
3.50
A. TC = €6,771 + 28% of total revenue.
B. $ 23,293
C. 2.41
3.51
B. $383,750.
C. $288,500.
D. $375,000.
E. 668,919 units, $1,705,135.
F. $485,363.
G.
Target Income Total Units
$100,000 239,050
$150,000 275,827
$2,000,000 x 10% = $200,000 312,604
3.52
B. Breakeven point is revenue of $900,442.
Revenue needed for an after-tax target income of $100,000 is $1,118,732.
C.
Product Emphasized After-Tax Profit
Pets $ 4,875
Food 26,250
Toys 11,250
Other 15,000
MINI-CASES
3.53
A. Wildcat Lair’s breakeven point is $67,143
The university’s breakeven point is $78,333
B. 24.5
3.54
A. TC = $19,774 + $6.02*children attending.
S = $27.07 per child
3.55
A. TR = 1,000*P – 2*P2
B. TC = $130,000-$200*P
C. P1 = $458.12 (rounded up)
P2 = $141.89 (rounded up)
D. Break even occurs at the following two points:
83.76 units
716.22 units
E. P = $300 per unit; 400 regulators