1.

Mercy Hospital has total variable costs of 80% of total revenues

and fixed costs of $20 million per year.  There are 70,000 patient-days
estimated for next year.  What is the break-even point expressed in total
revenue?

Answer-
Revinue 1
Fixed cost 20 (valus in million dollar)
variable costs 0.8
contribution margin 0.2
B.E.P 100
1. Deadwood Hospital has overall variable costs of 50% of total
revenues and fixed costs of $40 million per year.  There are
40,000 patient-days estimated for next year. What should be
the break-even point expressed in total revenue?

Answer- Revinue 1
Fixed cost 40 (valus in million dollar)
Variable cost 0.5
contribution margin 0.5
B.E.P 80
 3. The following information is for Kinsner Corporation:
Total fixed costs $313,500
Variable costs per unit $99
Selling price per unit $154
If management has a targeted net income of $59,400 (ignore income
taxes), what should be sales revenue?

Answer-
Total fixed cost 313500 (Values in dollar)
Variable cost per unit 99
Selling price per unit 154
Net income 59400

B.E.V. 6780
Sales revinue 1044120
 4. If the contribution-margin ratio is 0.30, targeted net income is $76,800, and
targeted sales volume in dollars is $480,000, then total fixed costs are _____.

Answer-
contribution-margin ratio 0.30
Net income 76800 (Values in dollar)
Sales volume 480000

Fixed costs 67200

 5. If the sales price per unit is $100, the total fixed costs are $75,000,
and the break-even volume in 5.dollar sales is $250,000, then what
should be the variable cost per unit?

Answer-
Sales price per unit 100 (Values in dollar)
Total Fixed cost 75000
B.E.V. sales 250000

Quantity of sales 2500

variable cost per unit 70
Answer-
Sales 14268 (Vallues in Dollar)
Cost of goods sold 10617
Gross Margin 3651

Other Operating expences 4417

Loss from operation 766
Fixed cost from COGS 2400
Fixed cost from other
expences 3000
Total fixed cost 5400
Total variable cost 9634

A. Compute the total contribution margin for 2021 and the gross margin percentage,.

Total contribution margin 32.48%

Gross margin percentage 25.58873

B. Explain and comment on contribution margin vs the gross margin.

C. Suppose that sales for Eastman Kodak were predicted to increase by 10% in 2022 and that the cost behavior was
expected to continue in 2022 as it did it 2021. Compute the predicted operating income (loss) for 2022.

sales in 2021 14268

Sales in 2022 15694.8
Variable cost in 2021 9634
Variable cost in 2022 10597.4
Fixed sost for 2021 5400
Fixed sost for 2022 5400

Losses From operation in

2022 -302.6

D.
 the cost behavior was
e (loss) for 2022.
 Total no of restaurants 930
total no of times restaurant
cleaned 35-50
Denver area 4000
In October the restaurant is
cleaned 35 times
Labor cleaning cost 18000
cleaning supply cost 8400

A.
Octoberr November December
No. of cleaning 35 40 45 50
Total area cleaned 140000 160000 180000 200000
Labor cost 18000 18000 18000 18000 (figures are in dollar)
cleaning supplies cost 8400 9600 10800 12000 (figures are in dollar)
Total cost 26400 27600 28800 30000 (figures are in dollar)
total cost per Cleaning 754.2857143 690 640 600 (figures are in dollar)
Total cost per square feet 0.188571429 0.1725 0.16 0.15
B. Charges
per square feet cleaning 0.17
Area of the resturant 4000 (figures are in dollar)
Total no. of cleaning in
November 45
total charges for November 30600 loss in movember 1800
Total no. of cleaning in
December 50
total charges for December 34000 loss in movember 4000
 35 40 45 50
140000 160000 180000 200000
8400 9600 10800 12000

0.06
“The Hard Rock café offer is too low. We would avoid paying sales commission, but we’d have to
incur an extra cost of 0.40 Rs per key chain to add the logo .If FKC sells below its regular selling
prices, it will begin a chain reaction of competitors’ price cutting and of customers wanting special
deals. I believe in pricing at no lower than 8% above our full cost of 93, 00,000 ÷ 20, 00,000 units =
4.65 Rs per unit plus the extra Rs0.40 per key chain the saving in commissions”.
1. Using the contribution margin techniques prepare an analysis .Use four columns income
statement: without special order, the effect of the special order, per unit and total with the special
order.
2. As the controller of the organization, would you agree with Mr.Aziz’s statement? What would be
the impact, if any, in the income statement and the net profits of the company for the period.
Particulars Amt In Rs
Sales 10000000
Less Cost of Goods Sold 6500000
Gross margin or Gross Profit 3500000
Less Selling and Administrative 2800000
Operating Income 700000

Fixed Manufacturing cost 2900000

Fixed Selling and Administrative 2000000
Sales commission 3% 300000
Volume of keychain produced 2000000
 avg. price of beer per glass 5
Avg. cost of beer per grass 3.5
Bartender price per month 2000
Waiter price per month 3000
Fixed expences 1000
Avg. sales per day 100 (In glasses)
total no of warking days in a
year 360
A. Revenue from sales 180000
fixed expences 72000
Variable expences 126000
Profit -18000

B. profit 7000
No of glasses selling per day 146.296296
 type 1
Net revenue 800000
Expences 880000
Net loss 80000
Advertising cost 200000
A.
B.E.revenue 1080000

B. profit 40000
net sales 1120000
Monthly Rent 75000
Equipment cost 1500000
Design cost 500000
Life span of Equipment
and design 120 Month
Charges per plate 400
Vagitable and ingredient
cost per plate 240
Other variable cost 40
Total Number of
employes 10
Total monthly salery 440000 C.
Other costs 300000 fixed cost
Total customer per day 400 Variable cot per unit
Total Fixed cost 831666.7 Revinue cost per unit
B.E. Quantity
A. D.
Number of plates 200 250 300 100 175 change in profit
Total fixed cost 831666.7 831666.7 831666.7 831666.7 831666.7
Variable cost 1680000 2100000 2520000 840000 1470000
Total cost 2511667 2931667 3351667 1671667 2301667
Total Revinue 2400000 3000000 3600000 1200000 2100000
Profit -111667 68333.33 248333.3 -471667 -201667

B.
fixed cost 831666.7
Variable cot per unit 8400
Revinue cost per unit 12000
B.E. Quantity 231.0185
~ 232
 part-2

losses in 3 month -605000

720000