Part 1

Part 2

Part 3

Part 4

This question is a combination of things that I have learned to this point, and it has stumped me. Any help at all would be greatly appreciated!

Mastery Problem: Cost-Volume-Profit Analysis Cost Behavior 1. Determine whether the costs in the table are variable, fixed, mixed, or none of these. portion of cost (per unit) answers to two decimal places. 3. Why does the total cost computed for 4,360 units not match the data for January? a. The high-low method is accurate only for months in which production is at full capacity. b. The high-low method only gives accurate data when fixed costs are zero. c. The high-low method gives a formula for the estimated total cost and may not match levels of production other than the highest and lowest. d. The high-low method gives accurate data only for levels of production outside the relevant range. Contribution Margin \begin{tabular}{lll} & \begin{tabular}{c} Cover-to-Cover \\ Company \end{tabular} & \begin{tabular}{c} Biblio Files \\ Company \end{tabular} \\ \hline Contribution margin ratio (percent) & \\ Unit contribution margin & \end{tabular} Income Statement - Cover-to-Cover Cover-to-Cover Company Contribution Margin Income Statement For the Year Ended December 31, 20 Y8 Sales $394,000 Variable costs: \begin{tabular}{lrr} Manufacturing expense & $236,400 & \\ Selling expense & 19,700 & \\ Administrative expense & 59,100 & (315,200) \\ \cline { 2 - 3 } Contribution margin & & $78,800 \\ Fixed costs: & $5,000 & \\ Manufacturing expense & 4,000 & \\ Selling expense & 10,700 & (19,700) \\ \cline { 2 - 3 } Administrative expense & & $59,100 \\ \cline { 2 - 3 } Operating income & \end{tabular} Income Statement - Biblio Files Biblio Files Company Contribution Margin Income Statement For the Year Ended December 31, 20 Y8 Sales $394,000 Variable costs: Manufacturing expense Selling expense Administrative expense Contribution margin Fixed costs: Manufacturing expense Selling expense Administrative expense Operating income \begin{tabular}{rr} $157,600 & \\ 15,760 & \\ 63,040 & (236,400) \\ \hline & $157,600 \\ & \\ 880,500 & \\ 10,000 & (98,500) \\ \hline & $59,100 \end{tabular} Sales Mix Target Profit except for the amount of sales. 1. If Cover-to-Cover Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales be? 2. If Biblio Files Company wants to increase its profit by $20,000 in the coming year, what must their amount of sales be? s. 3. What would explain the difference between your answers for (1) and (2)? a. Biblio Files Company has a higher contribution margin ratio, and so more of each sales dollar is available to cover fixed costs and provide operating income. b. Cover-to-Cover Company's contribution margin ratio is lower, meaning that it's more efficient in its operations. c. The companies have goals that are not in the relevant range. d. The answers are not different; each company has the same required sales amount for the coming year to achieve the desired target profit