# Traveler Aids, Housewares Inc., Strong Wood Company, Sharpens Inc., Soccer Nets

1) Travelers Aids most recent Income statement followsTotal Per UnitSales (3000 units) $90,000 $30.00Variable expenses $54,000 $18.00Contribution Margin $36,000 $12.00Fixed expenses $22,000Net operating income $14,000Prepare a new contribution format income statement under the following condition: The sales volume increased by 150 units. (New sales are 3,150 Units)2) Housewares Inc. distributes a single product, food processors whose selling price is $200 and whose variable cost is $140 per unit. The companys monthly fixed expense is $18,000.A) What is the companys breakeven point in unit sales using the equation method? Show computations.B) What is the companys breakeven point in sales dollars using the contribution margin method with the CM ratio? Show computations.3) Strong wood company is a distributor of patio furniture. Data concerning the next months budget appear belowSelling price $290 per unitVariable expense $174 per unitFixed expenses $158,000 per monthUnit sales 1,500 units per monthA) What is the companys margin of safety? Show computations.B) What is the companys margin of safety as a percentage of sales? Show computations.4) Sharpens inc. produces knife sets for use in commercial kitchens. They sell them for $400 each. Selected data for the companys operations last year follow.Units in beginning inventory 0Units produced 3,000Units sold 2,500Units in ending inventory 500Variable cost per unit:Direct materials $120Direct Labor 80Variable manufacturing overhead 40Variable selling administrative 20Fixed costs:Fixed manufacturing overhead $300,000Fixed selling and administrative $200,000A) Assume that the company uses variable costing. Compute the unit cost for one knife set. Show computations.B) Assuming that the company uses absorption costing, compute the unit cost for one knife set. Show computations.5) Soccer nets used for professional games they sell them for $200 each. Selected data for the companys operations last year follow:Units in beginning inventory 0Units produced 500Units Sold 300Units in ending inventory 200Variable costs per unit:Direct materials $75Direct labor 30Variable manufacturing overhead 10Variable selling and administrative 5Fixed costs:Fixed Manufacturing overhead $2,000Fixed selling and administrative $1,000A) Assume that the company uses variable costing. Compute the net operating income. Show computations.B) Assuming that the company uses absorption costing, compute the net operating income. Show computations.