Calculate a product’s break-even point, by sales units and by sales dollars, and construct a contribution margin income statement. Introduction Note: Accounting requires specific st
Calculate a product's break-even point, by sales units and by sales dollars, and construct a contribution margin income statement.
Introduction
Note: Accounting requires specific steps that need to be executed in a sequence. The assessments in this course are presented in sequence and must be completed in order.
Analysis and charting are used to provide specific information to inform management decisions.
Activity-based systems provide managers with cost information for strategic decision making and planning that is not readily available with other costing methods.
Instructions
Note: Accounting requires specific steps that need to be executed in a sequence. The assessments in this course are presented in sequence and must be completed in order.
Use the Analysis and Charting Template [XLSX] to complete this assessment. This assessment focuses on cost analysis and behavior. Based on the data provided in the template, identify cost behaviors, estimate products, and prepare a contribution margin income statement.
Competencies Measured
By successfully completing this assessment, you will demonstrate your proficiency in the course competencies through the following assessment scoring guide criteria:
- Competency 1: Analyze cost accounting systems.
- Calculate a product's break-even point by sales units.
- Calculate a product's break-even point by sales dollars.
- Competency 4: Analyze financial statements.
- Construct a contribution margin income statement showing sales, variable costs, and fixed costs at the break-even point.
- Competency 5: Communicate in a manner that is professional and consistent with expectations for professionals in the field of accounting.
- Communicate quantitative information accurately and effectively.
Problem 1
| BUS-FPX4061 – Managerial Accounting Principles | |||||||||||||||||
| Assessment 6: Analysis and Charting Worksheet | |||||||||||||||||
| Problem 1 | Input values | ||||||||||||||||
| Solve the given problem based on the following information. | |||||||||||||||||
| Crouch Corp. manufactures and markets various mountaineering products. | Company name | Crouch Corp. | |||||||||||||||
| Crouch Corp.'s managers are looking at the future of Product XYZ, which has | Product name | XYZ | |||||||||||||||
| not been as profitable as anticipated. Next year, the company plans to sell | Units sold | 1,500 | |||||||||||||||
| 1,500 units of Product XYZ at a price of $220 each. The fixed costs are projected | Price per unit | $220 | |||||||||||||||
| to be $225,000, for up to a maximum capacity of 4,500 units of Product XYZ for the year. | Fixed costs | $225,000 | |||||||||||||||
| Variable costs are projected to be $95 per unit. | Maximum capacity (in units) | 4,500 | |||||||||||||||
| Variable costs per unit | $95 | ||||||||||||||||
| Calculate Product XYZ's break-even point in: | |||||||||||||||||
| · Sales units | |||||||||||||||||
| · Sales dollars | |||||||||||||||||
| Round the contribution margin ratio and the break-even point to two decimal places. | |||||||||||||||||
| (a) | Break-even point in sales units = Fixed costs / Contribution margin per unit | ||||||||||||||||
| (Contribution margin per unit = Selling price per unit – Variable cost per unit) | |||||||||||||||||
| (b) | Break-even point in sales dollars = Fixed costs / Contribution margin ratio | ||||||||||||||||
| (Contribution margin ratio = Contribution margin per unit / Selling price per unit) | |||||||||||||||||
Problem 2
| Problem 2 | Input values | |||||||||||||||||
| Solve the given problem based on the following information. | ||||||||||||||||||
| Crouch Corp. manufactures and markets various mountaineering products. | Company name | Crouch Corp. | ||||||||||||||||
| Crouch Corp.'s managers are looking at the future of Product XYZ, which has | Product name | XYZ | ||||||||||||||||
| not been as profitable as anticipated. Next year, the company plans to sell | Units sold | 1,500 | ||||||||||||||||
| 1,500 units of Product XYZ at a price of $220 each. The fixed costs are projected | Price per unit | $220 | ||||||||||||||||
| to be $225,000, for up to a maximum capacity of 4,500 units of Product XYZ for the year. | Fixed costs | $225,000 | ||||||||||||||||
| Variable costs are projected to be $55 per unit. | Maximum capacity (in units) | 4,500 | ||||||||||||||||
| Variable costs per unit | $55 | |||||||||||||||||
| Create a contribution margin income statement at the break-even point, including: | ||||||||||||||||||
| · Sales | ||||||||||||||||||
| · Variable costs | ||||||||||||||||||
| · Fixed costs | ||||||||||||||||||
| Round the numbers to the nearest whole number. | ||||||||||||||||||
| Crouch Corp. Contribution Margin Income Statement (at break-even point) for Product XYZ | ||||||||||||||||||
| Sales | ||||||||||||||||||
| Less: Variable cost | ||||||||||||||||||
| Contribution margin | ||||||||||||||||||
| Less: Fixed costs (given) | ||||||||||||||||||
| Net income | ||||||||||||||||||
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