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Variable Cost; Equivalent Conversion Cost, CVP Analysis

1. Marcus Corporation is a wholesaler that sells a single product. Management has provided the following cost data for two levels of monthly sales volume. The company sells the product for $141.30 per unit.

Sales Volume (units) 6,000 7,000
Cost of Sales $347,400 $405,300
Selling & Admin Costs $436,800 $458,500

The total variable cost per unit is

2. Loll Company uses the weighted-average method in its process costing system. Operating data for the first processing department for the month of June appear below:

Units Percent Complete with Respect to Conversion
Beginning Work in Process Inventory 11,000 50%
Started into production during June


Ending Work in Process Inventory 21,000 80%

According to the company's records, the conversion cost in beginning work in process inventory was $46,915 at the beginning of June. Additional conversion costs of $825,183 were incurred in the department during the month.
What was the cost per equivalent unit for conversion costs for the month? (Round off to three decimal places.)

3. A company has provided the following data:

Sales 3,000 units
Sales Price $70 per unit

Variable Cost $50 per unit

Fixed Cost $25,000

If the sales volume decreases by 25%, the variable cost per unit increases by 15%, and all other factors remain the same, net operating income will: (Indicate an increase in net operating income with a + and a decrease in net operating income with a -.)

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Solution Summary

The solution computes variable cost, cost per equivalent unit for conversion costs & perform CVP analysis.