Part 2 - Answer the following questions Question 2 (30 marks) A Keys Company accumulates the following data concerning a mixed cost, using miles as the activity level Miles Driven Total Cost January 10,000 $15,000 February 8,000 13,500 March 9,000 14,400 April 7,500 12,500 Required: 1. Compute the variable and fixed cost elements using the high-low method 2. If it is estimated that 12,000 miles will be drive in May, what is the expected total cost for May? (7.5 Marks) B- XYZ Company sells its only product for $40 per unit. Its total fixed costs are $180,000 per annum. Its CM ratio is 20%. XYZ plans to sell 16,000 units this year. Required: 1. Calculate CM per unit and the variable cost per unit. 2. Calculate break-even point in unit sales and in dollar sales? 3. Calculate the unit sales and dollar sales required to achieve a target profit of $60,000 per year? 4. Assume that the company is able to reduce its variable costs by $4 per unit and accordingly the sales price per unit will also be reduced by 5%, a) Calculate the company's new break-even point in unit sales and in dollar sales? b) Calculate dollar sales required to achieve a target profit of $60,000? 5. In your opinion, did you think the company would be better off with the assumed reductions in (4)? Why? (12.5 marks) Summer 2019/2020