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Question-1 Dave's has total fixed costs of $45,000. If the company's contribution margin is 50%, the income tax rate is 28% and the selling price of a box of Jax is $23, how many boxes of Jax would the company need to sell to produce a net income of $19.000 Question-2 A company needs to sell 15.000 units of its only product in order to break even. Fixed costs are S180,000, and the per unit selling price and variable costs are 524 and Sll, respectively. If total sales are $270,000, the company's margin of safety will be equal to: Question-3 Spring Manufacturing sold 610,000 units of its product for 598 per unit in 2019. Variable cost per unit is $50, and total fixed costs are $1,870,000 Required 1. Calculate (a) contribution margin and (b) operating income 2. Spring's current manufacturing process is labor intensive. Jim Gate, Spring's production manager has proposed investing in state-of-the-art manufacturing equipment, which will increase the annual fixed costs to $6,770,000. The variable costs are expected to decrease to 535 per unit Spring expects to maintain the same sales volume and selling price next year. How would acceptance of Gate's proposal affect your answers to (a) and (b) in requirement 12 3. Should Spring accept Gate's proposal? Explain. Questios-4 Travel Agency specializes in flights between Toronto and Peru. It books passengers on Toronto Air North's fixed costs are $35,000 per month Toronto Air charges passengers 51,700 per round-trip ticket Calculate the number of tickets North Travel must sell each month to (a) break even and (b) make a target operating income of $17,000 per month in each of the following independent Required 1. North's variable costs are 533 per ticket, Toronto Air pays Sunset 5% commission on ticket price 2. North's variable costs are $37 per ticket Toronto Air pays Sunset 7% commission on ticket price 3. North's variable costs are $53 per ticket, Toronto Air pays 568 fixed commission per ticket to North. Comment on the results 4. North's variable costs are 540 per ticket. It receives S60 commission per ticket from Toronto Air It charges its customers a delivery fee of 55 per ticket Comment on the results III Air. It charges its customers a delivery fee of SS per ticket. Comment on the results. Questions The Sunshine Company manufactures and sells pens. Currently, 6,000,000 units are sold per year at 80.70 per unit. Fixed costs are $980,000 per year. Variable costs are $0.30 per unit. Consider each case separately: Required 1. R. What is the current annual operating income? b. What is the current breakeven point in revenues? Compute the new operating income for each of the following changes: 2. A S0.03 per unit increase in variable costs 3. A 12% increase in fixed costs and a 10% increase in units sold 4. A 18% decrease in fixed costs, a 20% decrease in selling price, a 10% decrease in variable cost per unit, and a 40% increase in units sold Conspute the new breakevea point in units for each of the following changes: 4. A 10% increase in fixed costs 5. A 10% increase in selling price and a $20,000 increase in fixed costs Question-6 Buller Company uses normal costing. It allocates manufacturing overhead costs using a budgeted rate per machine-hour. The following data are available for 2019: Budgeted manufacturing overhead costs $4,800,000 Budgeted machine-hours 180,000 Actual manufacturing, overhead costs $3,990,000 Actual machine-hours 150,000 Required: 1. Calculate the budgeted manufacturing overhead rate. 2. Calculate the manufacturing overhead allocated during 2019. 3. Calculate the amount of under or overallocated manufacturing overhead. Why do Buller's managers need to calculate this amount

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