ACCT 3320 - CHAPTER 3

3-1 Smoothies What if ... We sold smoothies for $2.00?

2100 2800 3500 2100
FC 2500 2500 2500 2500 Rev 4200
VC 0.75 1575 2100 2625 VC 1575
TOTAL COST 4075 4600 5125 Contribution Margin 2625
Cost per smoothie 1.94 1.64 1.46 FC 2500
Op Income 125

3-5 Hours What if ... We rent each for $40 per hour for 15000 hours
12000 14000 16000 18000 15000
VC 54,000 63,000 Rev 600,000
FC 504,000 504,000 VC 67,500
TOTAL COST 558,000 567,000 Contribution Margin 532,500
FC 504,000
Cost per Unit: Op Income 28,500
VC 4.50
FC 42.00
Tot cost per hour 46.50

3.8
b = rise / run = change in Y / change in X
X Y
Feb 3,500 14,500 =(14500-8500)/(3500-1500)
June 1,500 8,500 3.00

Y = a + bX
14500 = a + (3)(3500)
a= 14500 - (3*3500)
4,000
 Therefore Y = 4000 + 3X What if we expect 2300 blood tests?
Y = 4000 + 3*2300
10,900

3-11 APRIL
150
Rev 1500 225,000 Rev
VC-cogs 900 135,000 Cogs
VC-delivery 40 6,000 Gross Margin
VC- commission 4% 9,000 SG&A
VC-clerical 40 6,000 Op Income
Contribution Margin 69,000
FC - Advert 950
FC - salaries 2,900
FC - utilities 400
FC - depr 3,000
FC - exec salaries 8,000
FC - admin depr 500
FC - clerical 1,500
FC - Insurance 400
Op Income 51,350

3.14
b = rise / run = change in Y / change in X
X Y
May 260 24,000 =(24000-9600)/(260-80)
Oct 80 9,600 80.00

Y = a + bX
24000 = a + (80)(260)
a= 3,200

Therefore Y = 3200 + 80X What if we expect 600 jobs?

Y = 3200 + 80*600
51,200