Problem
Cortez Company makes two types of backpacks. Data for the company's activity during a
typical month are presented below:
The company's fixed expenses are $
Required:
a Determine the overall company contribution margin ratio.
b Determine the breakeven point for the company in terms of sales dollars if the sales mix
remains constant.
c Find the margin of safety in terms of sales dollars.
d If the sales mix is changed to units of the school model and units of the
hiker model, find the breakeven point in terms of sales dollars.
Problem
Jackson Company operates a cafeteria for its employees. The number of meals served each week
over the last seven weeks, along with the total costs of operating the cafeteria are given below:
Assume that the relevant range includes all of the activity levels mentioned in this problem.
Required:
a Using the highlow method of analysis, calculate the variable cost per meal served for ia
cafeteria costs.
b Calculate the fixed cost of the cafeteria.
c Construct a cost formula for total cafeteria costs.
d Estimate the total cafeteria costs to be incurred by Jackson Company if meals are
served.
