Integratine Exercise Integrative Exercise

Cost Behavior and Cost$-$Volume$-$Profit Analysis for Many Glacier Hotel

Using the High$-$Low Method to Estimate Variable and Fixed Costs aggregated data for the hotel's canoe and paddle manufacturing and marketing activities:

Manufacturing Data:

$\backslash$table$[[,\backslash$table$[[$Number of$],[$Canoes$]],\backslash$table$[[$Total Canoe$],[$Manufacturing$]],,\backslash$table$[[$Number of$],[$Paddles$]],\backslash$table$[[$Total Paddle$],[$Manufacturing$]]],[$Year Manufactured,Costs,Year Manufactured,Costs,,$],[20\backslash$times $9,250,$$$103,000,20\backslash$times $9,900,$$$38,500],[20\backslash$times $8,275,128,000,20\backslash$times $8,1,200,49,000],[20\backslash$times $7,240,108,000,20\backslash$times $7,1,000,44,000],[20\backslash$times $6,310,114,000,20\backslash$times $6,1,100,45,500],[20\backslash$times $5,350,141,500,20\backslash$times $5,1,400,52,000],[20\backslash$times $4,400,140,000,20\backslash$times $4,1,700,66,500]]$ Marketing Data:

Required:

High$-$Low Cost Estimation Method

a$.$ Use the high$-$low method to estimate the per$-$unit variable costs and total fixed costs for the canoe product line.

Variable cost per unit

$q$

Total fixed cost

$

b$.$ Use the high$-$low method to estimate the per$-$unit variable costs and total fixed costs for the paddle product line.

Variable cost per unit

$

$$

Total fixed cost Cost$-$Volume$-$Profit Analysis, Single$-$Product Setting

Use CVP analysis to calculate the break$-$even point in units for

a$.$ The canoe product line only $($i$.$e$.,$ single$-$product setting$)$

BE units

$$ canoes

b$.$ The paddle product line only $($i$.$e$.,$ single$-$product setting$)$

BE units

$$ paddles

Cost$-$Volume$-$Profit Analysis, Multiple$-$Product Setting

product setting$).$

Canoe BE units

$$ canoes

Paddle BE units

$$ paddles

Cost Classification

a$.$ Classify the manufacturing costs, marketing costs, and customer service hotline costs either as production costs or period costs.

All manufacturing costs are

$$ costs. All marketing costs and customer hotline costs are

costs

b$.$ For the period costs, further classify them into either selling expenses or general and administrative expenses.Sensitivity Cost$-$Volume$-$Profit Analysis and Production Versus Period Costs, Multiple$-$ Product Setting

would need to be sold in order to earn a target income of $$96,000?$ Assume the same sales mix and additional fixed costs as in Requirement $3.$

Canoe target income units

$x$ canoes

Paddle target income units

$x$ paddles

Margin of Safety

$$ total MOS units above total BE units

$

$$ MOS in sales dollars

Cout Behariar and Cant$-$Vohume$-$Profic Analyain far Many Claceer Hate

Ueing the High$-$Law Hethod to Exrmabe Worable and Fised Costs

Hanufacturing Data: $$

Marketing Data:

Required:

High$-$Low Cost Estimation Method

a$.$ Use the high$-$low method to estimate the per$-$unit variable costs and total fixed costs for the canoe product line.

b$.$ Use the high$-$low method to estimate the per$-$unit variable costs and total fixed costs for the paddle product line.

Variable cost per unit $,$

Total fixed cost

Coot$-$Volume$-$Profit Anelrnis, Single$-9$roduct Setbing

Use CVP aralysis to calculace the breskeven point in uncs for

a$.$ The canos product ire anly $($l$.$s$.,$ single$-$product setting$)$

BE units $,$ cances

b$.$ The naddle prodact ine ony $($b$.$e$,$ single$-$prodict seting$)$

BE u$=$ita $,$ paddles

Coot$-$Volume$-$Profit Analpas, Maltple$-$Product Setting

product oetringl:

Canse BE unts $,$ cances

Paddle BE unifi $$ paddes

Cout Clannfication

a$.$ Classify the manufacturing cossc$,$ marhesng costs, and customer service hodine costs either as production costs or period costs.

Ml marufacturng coats are product $$ couc. Al morketing coss and customer hatine costs are berriad $$ costs

Sersitivity Cost$-$Volume$-$Prsfi, Analpis and Froduction Versus Feried Cosis, Multiple. Product Setting

Canoe targer income units $,x$ canoes

Paddle target income units $x$ paddes

Margn of Sefety

Calculate the hotel's margin of safety $($toch is uniss and io sales dollars$)$ for Many Glacier Hocel, assuming the same facts as in Recurement $3,$ and assuming that $$ selts $700$ casces and $2,500$ paddes neat year

$$ tocal MOG unis above potal ve units

$$ MOS in sales dedurs