QUESTION E20.5

Through using the high-low method. Regency Hotels estimates the total costs of providing room service meals to amount to $5, 950 per month, plus 30 percent of room service revenue. a. What is the contribution margin ratio of providing room service meals? b. What is the break-even point for room service operations in terms of total room service revenue? c. What would you expect to be the total cost of providing room service in a month in which room service revenue amounts to $15,000? Porter Corporation has fixed costs of $660,000, variable costs of $24 per unit, and a contribution margin ratio of 40 percent. Compute the following: a. Unit sales price and unit contribution margin for the above product. b. The sales volume in units required for Porter Corporation to earn an operating income of $300,000. c. The dollar sales volume required for Porter Corporation to earn an operating income of $300,000. Jackson Company recently calculated its break-even sales revenue to be $15,000. For each dollar of sales revenue, $0.70 goes to cover variable costs. Compute the following: a. The contribution margin ratio. b. Total fixed costs. c. The sales revenue that would have to be generated to earn an operating income of $9,000. Firebird Mfg Co. has a contribution margin ratio of 45 percent and must sell 25,000 units at a price of $80 each in order to break even. a. Compute total fixed costs