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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

98,000

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.

\$2.19