GRAND CANYON ACC350 WEEK 2 Topic 2 Assignment

Details:
Please complete the following exercises and/or problems from
the textbook:

E21-30
E21-31
E21-37
CP21-63
Prepare your answers in an Excel workbook, using one
worksheet per exercise or problem.

Save your workbook using the filename
LastnameFirstinitial.ACC350.T# where the # represents the topic number. For
example, John Doe would submit assignment #5 using the following name:
DoeJ.ACC350.T5.

You are not required to submit this assignment to Turnitin.

E21-30 Determing mixed costs—the high-low method
The manager of Able Car Inspection reviewed the monthly
operating costs for the past
year. The costs ranged from $4,000 for 1,000 inspections to
$3,600 for 600 inspections.
Requirements
1. Calculate the variable cost per inspection.
2. Calculate the total fixed costs.
3. Write the equation and calculate the operating costs for
800 inspections.
4. Draw a graph illustrating the total cost under this plan.
Label the axes, and
show the costs at 600, 800, and 1,000 inspections.

Learning Objective 2 E21-31
Calculating contribution margin ratio, preparing contribution margin income
statements
2. $245,000 sales level, VC $73,500
For its top managers, Worldwide Travel formats its income
statement as follows:
WORLDWIDE TRAVEL
Contribution Margin Income Statement
Three Months Ended March 31, 2014
Sales Revenue $ 317,500
Variable Costs $95,250
Contribution Margin $222,250
Fixed Costs $175,000
Operating Income $ 47,250
Worldwide’s relevant range is between sales of $245,000 and
$364,000.
Requirements
1. Calculate the contribution margin ratio.
2. Prepare two contribution margin income statements: one at
the $245,000 sales

E21-37 Using sensitivity analysis
Dependable Drivers Driving School charges $250 per student
to prepare and administer
written and driving tests. Variable costs of $100 per
student include trainers’
wages, study materials, and gasoline. Annual fixed costs of
$75,000 include the
training facility and fleet of cars.
Requirements
1. For each of the following independent situations,
calculate the contribution
margin per unit and the breakeven point in units by first
referring to the
original data provided:
a. Breakeven point with no change in information.
b. Decrease sales price to $220 per student.
c. Decrease variable costs to $50 per student.
d. Decrease fixed costs to $60,000.
2. Compare the impact of changes in the sales price,
variable costs, and fixed costs
on the contribution margin per unit and the breakeven point
in units.

P21-63 Computing breakeven sales and sales needed to earn a
target profit;
performing sensitivity analysis
This problem continues the Davis Consulting, Inc. situation
from Problem P19-40
of Chapter 19. Davis Consulting provides consulting service
at an average price of
$175 per hour and incurs variable cost of $100 per hour.
Assume average fixed costs
are $5,250 a month.
Requirements
1. What is the number of hours that must be billed to reach
the breakeven point?
2. If Davis desires to make a profit of $3,000, how many
consulting hours must be
completed?
3. Davis thinks it can reduce fixed cost to $3,990 per
month, but variable cost will
increase to $105 per hour. What is the new breakeven point
in hours?