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    Total fixed cost per month produced

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    A.) The Bear and Bull Company produces two products: bears and bulls. The following information is available:
    Bears Bulls
    Unit Selling Price $6 $9
    Unit Variable Costs 2 3
    Unit Contribution Margin 4 6
    Sales Mix 65% 35%

    Additional information: Total company-wide fixed costs are $156,200.

    Given the stated sales mix, how many bulls will need to be sold in order to obtain a profit of $60,000?

    B.) Susie O disk jockey plays music at weddings, anniversaries, and birthdays. She would like to understand the cost structure of the company and has compiled the following records of activity and costs incurred. She believes that the number of functions catered is the best measure of activity.

    Function
    Cost

    January
    47
    $474

    February
    44
    $460

    March
    42
    $450

    April
    40
    $440

    1. Using the high-low method, estimate the variable cost per function and the total fixed cost per month. (Round off the variable cost per function to the nearest cent and the total fixed cost to the nearest dollar.)

    2. Using the least-squares regression method, estimate the variable cost per function and the total fixed cost per month. (Round off the variable cost per function to the nearest cent and the total fixed cost to the nearest dollar.)

    C.) The mission of Humpty Dumpty Preschool is to become the premier provider of childcare for children who are ages 2 through 5. At the time of the review process, management needs to be sure that the planned course of action will lead to the fulfillment of the organization's mission. Name and give an example of the next four steps that the preschool should take in articulating its strategic goals, beginning with defining a strategy.

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    Solution Preview

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    Answer:
    A) The Bear and Bull Company produces two products: bears and bulls. The following information is available:
    Bears Bulls
    Unit Selling Price $6 $9
    Unit Variable Costs 2 3
    Unit Contribution Margin 4 6
    Sales Mix 65% 35%

    Additional information: Total company-wide fixed costs are $156,200.
    Given the stated sales mix, how many bulls will need to be sold in order to obtain a profit of $60,000?

    Given that,
    Column1 Bears Bulls C0pmpay wide data
    Unit Selling price $6 $9 =$6*65%+$9*35%=$7.05
    Unit Variable cost $2 $3 =$2*65%+$3*35%=$2.35
    Unit contribution margin $4 $6 $4.70
    Sales ...

    Solution Summary

    The total fixed cost per months produced is examined.

    $2.19