Nama Natanael Sirait

Kelas 13 MR 2
Tugas Akuntansi Biaya II

1. Sell Block prepares three types of simple tax returns: individual, partnerships, and (small) corporations.
The tax returns have the following characteristics:

Individu Partnersh Corporati

als ips ons
Price charged per tax return . . . . . . $200 $1,000 $2,000
.....
Variable cost per tax return
(including $180 $900 $1,800
wage paid to tax preparer) . . . . .
.....
Expected tax returns prepared per $4.000
year. . . $60.000 $16.000
The total fixed costs per year for the company are $3,690,000.

a. What is the anticipated level of profits for the expected sales volumes?
b. Assuming that the product mix is the same at the break-even point, compute the break-even point.
c. Suppose the product sales mix changes so that, for every ten tax returns prepared, six are for
individuals, one is for a partnership, and three are for corporations. Now what is the break-even
volume for Sell Block?
Jawab:

a. What is the anticipated level of profits for the expected sales volumes?
Total Revenue = Price x Unit of Output
Variable Cost = Varible Costs per Unit x Unit of Output
Profit = [Price - Varible Costs per Unit] x Unit of Output - Fixed Cost

Individuals + Partnerships + Corporations

$200 x 60.000 $1.000 x 4.000 $2.000 x 16.000 = $48.000.000 (P.X)
$180 x 60.000 $900 x 4.000 $1.800 x 16.000 = $43.200.000 (V.X)
$20 x 60.000 $100 x 4.000 $200 x 16.000 = $4.800.000 (P-V)X
$3.690.000 (F)
$1.110.000 (Profit)

b. Assuming that the product mix is the same at the break-even point, compute the break-even point.
Weights :
Individuals = 60.000 : (60.000 + 4.000 + 16.000) = 0.75
Partnership = 4.000 : (60.000 + 4.000 + 16.000) = 0.05
Corporations = 16.000 : (60.000 + 4.000 + 16.000) = 0.20

Individuals. . . . . . . . . . . . . . . 0.75 x ($200 - $180) = $15

Partnerships . . . . . . . . . . . . . 0.05 x ($1.000 - $900) = $5
Corporations . . . . . . . . . . . . . 0.20 x ($2.000 - $1.800) = $40
Contribution Margin . . . . . . . $60
Weighted Average Contribution Margin = $60
 Breakeven Point :
Profit = 0
Profit = (P-V)X - F = 0
0 = 60X - $3.690.000
X = $3.690.000/60 = 61.500 Total Returns
Individuals = 0.75 x 61.500 = 46.125 Returns
Partnership = 0.05 x 61.500 = 3.075 Returns
Corporations = 0.20 x 61.500 = 12.300 Returns

c. Suppose the product sales mix changes so that, for every ten tax returns prepared, six are for
individuals, one is for a partnership, and three are for corporations. Now what is the break-even
volume for Sell Block?
New Weights :
Individuals = 0.60
Partnership = 0.10
Corporations = 0.30

Individuals. . . . . . . . . . . . . . . 0.60 x ($200 - $180) = $12

Partnerships . . . . . . . . . . . . . 0.10 x ($1.000 - $900) = $10
Corporations . . . . . . . . . . . . . 0.30 x ($2.000 - $1.800) = $60
Contribution Margin . . . . . . . $82

Weighted Average Contribution Margin = $82

Breakeven Point :

Profit = 0
Profit = (P-V)X - F = 0

0 = 82X - $3.690.000

X = $3.690.000/82 = 45.000 Total Returns

Individuals = 0.75 x 45.000 = 27.000 Returns

Partnership = 0.05 x 45.000 = 4.500 Returns
Corporations = 0.20 x 45.000 = 13.500 Returns

2. Assume that Limitless Labs, Inc., offers three basic drug-testing services for professional athletes. Here
are its prices and costs:
Price per Variable Cost Units Sold
Unit per Unit per Year
Basic . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $ 500 $ 120 $850
Retest . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 800 400 100
Vital . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4,000 2,800 50

Variable costs include the labor costs of the medical technicians at the lab. Fixed costs of $390,000 per
year include building and equipment costs and the costs of administration. A basic “unit” is a routine drug
test administered. A retest is given if there is concern about the results of the first test, particularly if the test
indicates that the athlete has taken drugs that are on the banned drug list. Retests are not done by the
laboratory that performed the basic test. A “vital” test is the labora- tory’s code for a high-profile case. This
might be a test of a famous athlete and/or a test that might be challenged in court. The laboratory does extra
work and uses expensive expert technicians to ensure the accuracy of vital drug tests. Limitless Labs is
subject to a 40 percent tax rate.

a. Given the above information, how much will Limitless Labs earn each year after taxes?
b. Assuming the above sales mix is the same at the break-even point, at what sales revenue does Limitless
Labs break even?
c. At what sales revenue will the company earn $180,000 per year after taxes assuming the above sales
mix?
d. Limitless Labs is considering becoming more specialized in retests and vital cases. What would be the
company’s break-even revenues per year if the number of retests increased to 400 per year and the
number of vital tests increased to 200 per year, while the number of basic tests dropped to 100 per year?
With this change in product mix, the company would increase fixed costs to $420,000 per year. What
would be the effect of this change in product mix on Limitless Labs’s earnings after taxes per year? If
the laboratory’s managers seek to maximize the company’s after-tax earnings, would this change be a
good idea?
Jawab:
a. Given the above information, how much will Limitless Labs earn each year after taxes?

Total Revenue = Price x Unit of Output

Variable Cost = Varible Costs per Unit x Unit of Output
Profit = [Price - Varible Costs per Unit] x Unit of Output - Fixed Cost
Basic + Retest + Vital
$500 x 850 $800 x 100 $4.000 x 50 = $705.000 (P.X)
$120 x 850 $400 x 100 $2.800 x 50 = $282.000 (V.X)
$380 x 850 $400 x 100 $1.200 x 50 = $423.000 (P-V)X
$390.000 (Fixed Cost)
$33.000 (Profit Before Taxes)
Income tax @40% = 0.4 x $33.000 = $13.200
zProfit After Taxes = $33.000 - $13.200 = $19.800
b. Assuming the above sales mix is the same at the break-even point, at what sales revenue does
Limitless Labs break even?

Weights :
Basic = 850 : (850 + 100 + 50) = 0.85
Retest = 100 : (850 + 100 + 50) = 0.10
Vital = 50 : (850 + 100 + 50) = 0.05

Selling Price per Variable Cost per Contribution

Unit Unit Margin per Unit
Basic $500 $120 $380
Retest $800 $400 $400
Vital $4,000 $2,800 $1.200

Weighted Average Revenue = (0.85 x $500) + (0.10 x $800) + (0.05 x $4.000)

= $705
Weighted Average CM = (0.85 x $380) + (0.10 x $400) + (0.05 x $1.200)
(Contribution Margin) = $423
 Weighted Average CM (%) = $423/$705 = 60%

Breakeven Sales Revenue = Fixed Cost / Weighted Average CM (%)

= $390.000/0.6 = $650.000
c. At what sales revenue will the company earn $180,000 per year after taxes assuming the above sales
mix?

After taxes income = $180.000

Before taxes income = [$180.000/(1-0.4)]
= $300.000
Sales Revenue = (Fixed Cost + Required Profit)/Weighted Average CM (%)
= ($390.000 + $300.000)/0.6
= $1.150.000
d. Limitless Labs is considering becoming more specialized in retests and vital cases. What would be
the company’s break-even revenues per year if the number of retests increased to 400 per year and
the number of vital tests increased to 200 per year, while the number of basic tests dropped to 100
per year? With this change in product mix, the company would increase fixed costs to $420,000
per year. What would be the effect of this change in product mix on Limitless Labs’s earnings after
taxes per year? If the laboratory’s managers seek to maximize the company’s after-tax earnings,
would this change be a good idea?

Basic + Retest + Vital

$500 x 100 $800 x 400 $4.000 x 200 = $1.170.000 (P.X)
$120 x 100 $400 x 400 $2.800 x 200 = $732.000 (V.X)
$380 x 100 $400 x 400 $1.200 x 200 = $438.000 (P-V)X
$420.000 (Fixed Cost)
$18.000 (Profit Before Taxes)
Income tax @40% = 0.4 x $18.000 = $7.200
Profit After Taxes = $18.000 - $7.200 = $10.800

Based on after-tax profit, Limitless Labs should not change the product mix.