Exercises: CVP Analysis - Advanced ‘nitinemasbenidaburcepbico-u.eduph Switch account e Your email be ected when you submit this fm * Requred ‘Sumame, First Name, MI” Your answee ‘Answer the following problems, Please read the instructions carefuly below. Forpercertpeeuetha' agnor Sow) When sangatas rant mots 2DEcIMa. PLACES onpivey tag ouranverenearect. Refer to this formation forthe following questions: 10.3 (CVP analysis; advanced) Furhunks Express hx ‘Alaska. A seats are ist clas andthe olin data seal pier Number of sas per pase tains o ‘rape ad acter (perenage fe led) 1% ‘era a passenger fe $10 ‘erage var cost per asenger seo Fes operating os pet month s24on900Refer ta ths information forthe following questions: 1.0.3 (CVP analysis; advanced) Faishanks Express isa luxury passenger caver in ‘Alska. All seats are fist cas and the folowing data are available Number of at ar passenger tain ct « ‘Aveage fl pasenger fe $140 ‘verge vale cost per passenger $0 Fed operating cot per marth szacoomn "Whats the break-even point in passengers per month? * \What isthe break-even point in revenues per month? * It Fairbanks Express raises its average patsonger fare to $170, itis estimated thet the load factor wil decrease to 60 percent. What willbe the ‘monthly break-even point in number of passenger cars? *(Refer to original data.) Fuel cost isa significant variable cost to any railway. I Conde olincreases by $16 per barrel, itis estimated that variable cost per [passenger will ise to $80. What would be the new break-even point: input your answers below) [BEP in passengers? * 2 pont Your answer BBEP in numberof passenger cars? * 2 pont Your answer Fairbanks Express has experienced an increase in variable cost per 2 port passenger to $70and an increase in total fixed cost to $3,000,000. The ‘company has decided to raise the average fare to $160. Ifthe tax rate is 40, percent, how many passengers per month are needed to generate an after-tax profit of $800,000?" You answer(Use original data) Fairbanks Express is considering offering discounted 00m ‘are of $100, which the company believes would increase the load factor to £80 percent. Only the additional seats would be sold at the discounted fare. Additional monthly advertising cost would be $160,000, How much pre-tax Income would the discounted fare provide Fairbanks Expross ifthe company has 40 passenger train cars per day, 30 days per month? * Fairbanks Express has an opportunity to obtain a new route that would be ‘traveled 15 times per month. The company beliovesit can sel seats at $150.0n the route, but the load factor would be only 60 percent. Fixed cost would increase by $200,000 per menth fr adeltional crew. adeitional passenger train cars, maintenance, and so on. Variable cost per passenger would remain at $60, ‘Your anewer ‘Should the company obtain the route? = port Ove Ow How many passenger train cars must Fairbanks Express operate to-earn poiHow many passenger train cars must Fairbanks Express operate to earn 1 port pre-taxincome of $101,000 per month on this route? * It the load factor could be increased to 75 percent, how many passenger int train cars must be operated to eam pro-tax income of $101,000 por month fon this route? * Given: LOS (CVF; DOL; MS—two quarters; comprehensive) Following is information pertaining to Dayton Cavs operations ofthe First and second quarter of 2010 ‘quanren Fst Second Units Prodscton 79000 000 Sales 00 270,900 pected acy eel 500 5000 Uni sting pce $7500 $ 7500 Uni vase cons Dect materi $3450 $3450 Diet bor 1650 1650 Factory ovethead 780 730LOS (CVP; DOL; MS—two quarters; comprehensive) Fallowing is information peraining to Dayton Co.s operations ofthe fist and second quarter of 2010: ‘ouanren Ft Second Uns Production 70000 2000 Ses 00 9000 Expected active 15,000 65000 Unit sting price $70 $7500 Un verable corte ‘hect mats smso $3450 tect bor 1650 1650 Factory overhead 730 790 Satin and odminttative s70 570 Fed cons Foctry overhead siaso00 195000 Sag and adminttate 200 42500 Additional Information + "There were no ished goods at January 1, 2010. + Dayton Co. writes off any quarterly undersppied or overaplid overhead as an adjustment to Cost of Goo Sl + Dayton Co. income tx rate i 35 percent Calculate each ofthe following for 2010 if 260,000 units were produced and oldUnit contribution margin." "port Contribution margin ratio." port ‘otal contribution maegin. 1 pont Netincome.* 1 pont Degree of operating leverage. * 1 pontAnnual break-even unit sales volume. * 1 You answer Annual break-even dolar sales volume.” poet Your anower ‘Annual margin of safety asa percentage. 1 Yow anewer ‘Annual margin of safety in units." poet You answer iver 1L02-LO.s (Comprehensive; multiproduct) Nature's Oven makes three types of ‘wood flooing: Oak, Hickory, and Cherry. The company’s tx rate is 40 percent. The following cost are expected for 2011Givens 1L0.2-10.5 (Comprehensive; multiproduct) Natwe’s Own makes three pes of ‘wood flooring: Oak, Hickory, and Cheer. The company’s x rate i 40 percent. The following costs ae expected for 201 (Oak Hickory chery arabe cos (ona persue yarbas) Direct mater soa $650 $1760 Dect labor a Predation oven 20 © 03 350 Satiogepense 109 050400 ‘minseive expense om mw Feed ota 70000 Fed slog expense 240000 Fred aise cxpenie 200000 Per-square-yad expected selling prices ar as follows: Oak, $32.80; Hickory, $16.00; and Cherry, $50.00. Te expected ales mix iss fllows: ak Hickory chery Sauareyeds 96m 72000 «60m Your answer Calculate the break-aven point in revenue for 2011." Your answerHow many square yards of each product are expacted to be soldat the break- ‘even point? (input your answers below) Your answer oak" ‘po Your answer Hickory * ‘po cherry" on It the company wants to earn pre-tax profit of $800,000, how many square yards of each type of flooring Would it need to sel? (input your answers below)(ok os Hickory* os Chery vo If the company wants to earn an after-tax profit of $480,000, determine 1s the revenue needed using the contribution margin percentage approach. * It the company achieves the revenue determined above, whatls the soit margin of safety in dolar? *‘the revenue needed using the contribution margin percentage approach * It the company achieves the revenue determined above, whatis the pot margin of safety in dolars?* margin of safety asa percentage?" pane BONUS Question: When i my Birthday? Hahahaha! * pane Never stmt passwords ough ope Farms ‘stories of Ballmer esr Ase Google Forms