Exercise 2-6A (Algo) Fixed versus variable cost behavior LO 2-1 Adams Trophies makes and sells trophies it distributes to little league ballplayers. The company normally produces and sells between 6,000 and 12,000 trophies per year. The following cost data apply to various activity levels: Required Complete the following table by filling in the missing amounts for the levels of activity shown in the first row of the table. Note: Round "Cost per unit" answers to 2 decimal places. Exercise 2-3A (Algo) Determining fixed cost per unit LO 2-1 Fanning Corporation incurs the following annual fixed costs: Determine the total fixed Kost per unit of production, assuming that Fanning produces 8,500,9,000,0 or 9,500 units. Note: Round your answers to 2 decimal places. Exercise 2-14A (Algo) Assessing the magnitude of operating leverage LO 2-4 The following income statement applies to Baird Company for the current year: Required a. Use the contribution margin approach to calculate the magnitude of operating leverage. b. Use the operating leverage measure computed in Requirement a to determine the amount of net income that Baird Company will earn if it experiences a 15 percent increase in revenue. The sales price per unit is not affected. c-1. Verify your answer to Requirement b by constructing an income statement based on a 15 percent increase in sales revenue. The sales price is not affected. c-2. Calculate the percentage change in net income for the two income statements. Complete this question by entering your answers in the tabs below. Calculate the percentage change in net income for the two income statements. Exercise 2-7A (Algo) Fixed versus variable cost behavior LO 2-1 Stuart Entertainment sponsors rock concerts. The company is considering a contract to hire a band at a cost of $80,000 per concert. Required a. What are the total band cost and the cost per person if concert attendance is 10,000,10,500,11,000,11,500,0 or 12,000 ? b. Is the cost of hiring the band a fixed or a variable cost? Complete this question by entering your answers in the tabs below. What are the total band cost and the cost per person if concert attendance is 10,000,10,500,11,000,11,500, or 12,000 ? Note; Round "Cost per person" answers to 2 decimal places. Exercise 2-16A (Algo) Estimating fixed and variable costs using the high-low method LO 2-6 Vernon Boat Company makes inexpensive aluminum fishing boats. Production is seasonal, with considerable activity occurring in the spring and summer. Sales and production tend to decline in the fall and winter months. During year 2 , the high point in activity occurred in June when it produced 204 boats at a total cost of $153,840. The low point in production occurred in January when it produced 36 boats at a total cost of $48,000. Required a. Use the high-low method to estimate the amount of fixed cost incurred each month by Vernon Boat Company. b. Determine the total estimated cost if 110 boats are made. Exercise 2-13A (Algo) Using contribution margin format income statement to measure the magnitude of operating leverage LO 2-3, 2-4 The following income statement was drawn from the records of Rundle Company, a merchandising firm: Required a. Reconstruct the income statement using the contribution margin format. b. Calculate the magnitude of operating leverage. c. Use the measure of operating leverage to determine the amount of net income Rundle will earn if sales increase by 20 percent. Complete this question by entering your answers in the tabs below. Reconstruct the income statement using the contribution margin format. Exercise 2-12A (Algo) Using fixed cost as a competitive business strategy LO 2-1, 2-2 The following income statements illustrate different cost structures for two competing companies: Required a. Reconstruct Adams's income statement, assuming that it serves 162 customers when it lures 81 customers away from Zachary by lowering the sales price to $140 per customer. b. Reconstruct Zachary's income statement, assuming that it serves 162 customers when it lures 81 customers away from Adams by lowering the sales price to $140 per customer. Complete this question by entering your answers in the tabs below. Reconstruct Adams's income statement, assuming that it serves 162 customers when it lures 81 customers away from Zachary by lowering the sales price to $140 per customer