Salem Telephone

In: Business and Management

Submitted By edwardki
Words 325
Pages 2
Ed Kiefer
Chapter 4
4-5
10500-8500/900000-300000 2000/600000= .003
8500-(.003x300000)
Low 8500-900=7600 Copies
20500-(.003x900000)
High 20500-2700=17800 Copies

4.8
Variable costs
Staff Salaries 33000
Office supplies 300
Total 33300
Fixed costs
Manager salaries 8000
Dep of equip 400
Share of building
Costs 2000
Total 10400

Variable
Total 33300/70 $475.72
Fixed
Total 10400/70 148.57

4-12
Break even point
FC=$300,000 VC per Dollar= $.40
$300,000x.40=$120,000 Variable cost

4-17
0=2,035,000(x)-1,340,000
0=695000/2035000
34%

Sales increase 15%=2,035,000x.15=305250
Sales=$2,950,750
0=2,950,750-1,340,000
1355750/2950750
45%
Because we only increased profits and did not add to fixed or Variable cost.

4-18-
Selling price A= $90 Selling price B=$80
Less Variable Costs= $30 Less Variable Costs= $44
Contribution margin= 60 Contribution Margin=$36
Labor Hours A= 6 Labor Hours b=3
Contribution Margin Per Hour A= $10 Contribution Margin Hours Per B=$12
Contribution Margin Given Contribution Margin Given
350 Hours= $3500 350 Hours= $4200
365 Hours= $3650 365 Hours= $4380
They should produce B. With the additional 15 hours they can produce 5 additional units and increase profits by 180 dollars.
Problem 12 A. Contribution Margin Ratios
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