Question: I need help figuring out the answer to these questions. Part A. Break-even Analysis The management of Quivers Inc. wants to determine the number of




I need help figuring out the answer to these questions.





Part A. Break-even Analysis The management of Quivers Inc. wants to determine the number of cases required to break even per month. The utilities cost, which is part of factory overhead , is a mixed cost. The following information was gathered from the first six months of operation regarding this cost: Month Case Production Utility Total Cost January 500 600.00 February 800 660.00 March 1,200 740.00 April 1,100 720.00 May 950 690.00 June 1,025 705.00 Instructions 1. Determine the fixed and variable portion of the utility cost using the high-low method. 2. Determine the contrinution margin per case. 3. Determine the fixed costs per month, including the utility fixed cost from question (1). 4. Determine the break-even num ber of cases per monthREQUIREMENT #1: Determine the fixed and variable portion of the utility cost using the high-low method. High-Low Method Variable Cost Difference per Unit Difference in Total Cost in Production Variable Units of Total Cost Cost per X Producti Fixed Unit on Costs High Point X Low Point XREQUIREMENT #2: Determine the contrinution margin per case. Contribution Margin Selling Price Less variable costs per case: Direct materials Direct labor Utilities (see High-Low Method) Selling expenses Total variable costs per case Contribution margin per caseREQUIREMENT #3: Determine the fixed costs per month, including the utility fixed cost from question (1). Total Fixed Costs Utilities [see High-Low Method) Facility lease Equipment depreciation SuppliesRequirement #4: Determine the break-even num ber of cases per month. Break-even Analysis Break-even Unit Sales (units) Fixed Costs Contribution Margin
Step by Step Solution
There are 3 Steps involved in it
Get step-by-step solutions from verified subject matter experts
