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# Understanding CVP Relationships

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Calculate the missing amounts for each of the following firms. (Negative amount should be indicated by a minus sign. Do not round your intermediate calculations. Round your answers to 2 decimal places. Omit the "\$" sign in your response.)

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#### Solution Summary

The attached excel file contains illustrations and instructions on the relationships between the various components of the CVP Relationship, including: units sold, selling price, variable cost, contribution margins, fixed cost, and operating income.

\$2.19
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## Cost classification, estimating costs based on behavior petterns, understanding CVP relationships

12.2
Cost classifications. For each of the following costs, check the column(s) that most likely to apply:
Cost Variable Fixed
Raw materials
Staples used to secure packed boxes of product
Plants janitor's wages
Order processing clerks' wages
Production workers' wages
Production supervisiors' salaries
Sales force commissions
Maintenance supplies used
President's salary
Electricity cost
Real estate taxes for:
Factory
Office building
12.4
Estimating costs based on behavior patterns: Tony estimates that the costs of insurance, license, and depreation to operate his car total \$580 per month and that the gas, oil, and maintenance costs were 40 cents per mile. Tony also estimates that, on average, he drives his car 1,800 miles per month.
Required:
A. How much cost would Tony expect to incur during October if he drove the car 2,256 miles?
B. Would it be meaningful for Tony to calculate an estimated average cost per mile for a typical 1,800-mile month? Explain your answer.

12.6
Understanding CVP relationships.
Calculate the missing amounts for each of the following firms:
Units selling variable costs contribution fixed operating
Sold price per unit margin costs income (loss)
Firm A 5,600 \$12.00 ? \$25,200 \$20,300 ?
Firm B 16,800 ? \$22.20 ? 84,500 \$43,180
Firm C ? 7.30 3.20 28,700 ? (13,500)
Firm D 14,160 ? 55.25 66,552 73,250 ?

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