Chapter 16 The Behavior of Costs

Problem 16-1
A. Title each graph to show the type of cost it describes
a. Fixed Costs
b. Variable Costs
c. Semi variable Costs
d. Step-Function Costs
B. From the list of costs, select those that each graph describes
a. Variable Costs
b. Fixed Costs
c. Semi variable Costs
d. Step-Functional Costs
Problem 16-2
A. What is Doyles Candy Companys break-even point in boxes of candy
fot the current year?
Xn
= TFC
UP-UVC
= 1,056,000
9.60 5.76
= 275,000 boxes
B. What selling price per box must Doyles Candy Company charge to
cover the 15% increase in variable production costs of candy and still
maintain the current contribution margin percentage
ASP = 9.6 + 15% (1.44)
= 11.04 per box
C. What volume of sales in dollars must Doyles Candy Company achieve
in the coming year to maintain the same net income after taxes as
projected for the current year if the selling price of candy remains at
$9.60 per box and the variable production costs of candy increase
15%.?
ASV = SP x 15%
= 330,000 X 11.04
= $ 4,305,600.00