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Supplemental Problem #1 Walters, LLC produces knock-off watches. Each watch sells for $40.00. Walters produced and sold 100 watches last year. Use the following cost data to compute the variable cost per unit and the fixed cost for the period. Volume Cost 10 $ 800.00 20 $1,100.00 15 $ 900.00 12 $ 900.00 18 $1,050.00 25 $1,250.00 1. Using the high-low method, determine the amount of variable cost per unit. Answer: 2. Using the high-low method, determine the total amount of fixed costs. Answer: 3. What is the variable cost ratio? Answer: 4. 4. What is the contribution margin per unit? Answer: 5. 5. What is the contribution margin ratio? Answer: 6. 6. How many watches must Walters sell to break even? Answer: 7. 7. What is the break-even sales revenue? Answer: 3. 8. What was Walters' operating income last year? Answer: 9. What was Walters' margin of safety? Answer: . 10. Assume the company has a desired net income of $1,500. (1) How many sales dollars must the company earn? (2) How many watches must the company sell? Answer: Answer: 7

          Supplemental Problem #1
Walters, LLC produces knock-off watches. Each watch sells for $40.00. Walters produced and sold 100 watches last year.
Use the following cost data to compute the variable cost per unit and the fixed cost for the period.
Volume	Cost
10	$ 800.00
20	$1,100.00
15	$ 900.00
12	$ 900.00
18	$1,050.00
25	$1,250.00
1. Using the high-low method, determine the amount of variable cost per unit.
Answer:
2. Using the high-low method, determine the total amount of fixed costs.
Answer:
3. What is the variable cost ratio?
Answer:
4. 4. What is the contribution margin per unit?
Answer:
5. 5. What is the contribution margin ratio?
Answer:
6. 6. How many watches must Walters sell to break even?
Answer:
7. 7. What is the break-even sales revenue?
Answer:
3. 8. What was Walters' operating income last year?
Answer:
9. What was Walters' margin of safety?
Answer:
. 10. Assume the company has a desired net income of $1,500. (1) How many sales dollars must the company earn? (2)
How many watches must the company sell?
Answer:
Answer:
7

Supplemental Problem #1
Walters, LLC produces knock-off watches. Each watch sells for 40.00. Walters produced and sold 100 watches last year.
Use the following cost data to compute the variable cost per unit and the fixed cost for the period.
Volume Cost
10 800.00
20 1,100.00
15 900.00
12 900.00
181,050.00
25 1,250.00
1. Using the high-low method, determine the amount of variable cost per unit.
Answer:
2. Using the high-low method, determine the total amount of fixed costs.
Answer:
3. What is the variable cost ratio?
Answer:
4. 4. What is the contribution margin per unit?
Answer:
5. 5. What is the contribution margin ratio?
Answer:
6. 6. How many watches must Walters sell to break even?
Answer:
7. 7. What is the break-even sales revenue?
Answer:
3. 8. What was Walters' operating income last year?
Answer:
9. What was Walters' margin of safety?
Answer:
. 10. Assume the company has a desired net income of1,500. (1) How many sales dollars must the company earn? (2)
How many watches must the company sell?
Answer:
Answer:
7

Added by Mar D.

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