# Instructor Assignment # 1

$3.50

- Alex Miller, Inc., sells car batteries to service stations for an average of $30 each. The variable cost of each battery is $20 and monthly fixed manufacturing costs total $10,000. Other monthly fixed costs of the company total $8,000.

Required:

a. What is the breakeven point in batteries?

b. What is the margin of safety, assuming sales total $60,000?

c. What is the breakeven level in batteries, assuming variable costs increase by 20%?

d. What is the breakeven level in batteries, assuming the selling price goes up by 10%, fixed manufacturing costs decline by 10%, and other fixed costs decline by $100? - Royer Corporation gathered the following information:

Variable costs$945,000

Income tax rate40%

Contribution-margin ratio30%

Required:

a. Compute total fixed costs assuming a breakeven volume in dollars of $1,350,000.

b. Compute sales volume in dollars to produce an after-tax net income of $108,000. - Furniture, Inc., sells lamps for $30. The unit variable cost per lamp is $22. Fixed costs total $9,600.

Required:

a. What is the contribution margin per lamp?

b. What is the breakeven point in lamps?

c. How many lamps must be sold to earn a pretax income of $8,000?

d. What is the margin of safety, assuming 1,500 lamps are sold?