Reference no: EM131013520

1. Thomas Train has collected the following information over the last six months.

Month                                            Units produced       Total costs

March                                             10,000         $25,600

April                                                12,000         26,200

May                                                 18,400         29,200

June                                                13,000         26,450

July                                                  12,000         26,000

August                                           15,000         26,500

Using the high-low method, what is the variable cost per unit?

2. Rooter's Cleaning Services provided data concerning the costs incurred to clean hotel rooms for which hotel customers pay $150 per night. Data for the past 7 months are as follows:

	January	February	March	April	May	June	July
Number of rooms cleaned	250	160	200	150	270	170	260
Cleaning cost	$6,450	$4,060	$5,100	$4,100	$7,000	$4,200	$6,530

 

How much are estimated monthly variable costs using the high-low method?

3. Tim Taylor has written a self improvement book that has the following cost characteristics:

Selling Price $16.00 per book

Variable cost per unit:
Production $4.00
Selling & administrative 2.00

Fixed costs:
Production $94,200 per year
Selling & administrative 22,500 per year

How many units must be sold to break-even?

4. Assume Sparkle Co. expects to sell 150 units next month. The unit sales price is $90, unit variable cost is $40, and the fixed costs per month are $5,000. The margin of safety is: