CVP Formulas
Given a sales volume of 300, total sales of $500,000, and total variable expenses of $200,000, calculate the contribution margin.
$300,000
Classify the following as DM/DL/MOH: An employee who mixes the ice cream at a Ben and Jerry's factory
Direct Labor
You are asked to determine the 10 top performing products in your company (you have 200 products total). In order to save time, which excel function should you use to complete this task?
Conditional formatting
If you are preparing a contribution format income statement, you know that this will be used for what kind of reporting?
Internal reporting, use for managers, etc.
Given a sales volume of 300, total sales of $500,000, and total variable expenses of $200,000, calculate the contribution margin per unit.
$1000
Cost object: Pappajohn Business Building
Classify as direct or indirect: Electric bill for the University of Iowa
Indirect
On excel, Q2 is your sales, and Q3 is your variable expenses. Your classmate types =Q2*Q3 into excel to find contribution margin. Explain what they have done wrong, and how to fix it.
=Q2-Q3
Your team decides to allocate MOH per unit, instead of by direct labor or machine hours. How would you explain to them that this is a bad idea?
Depending on the job, you may under or over-allocate MOH, because not every job will use the same amount of overhead cost.
Given a sales volume of 300, total sales of $500,000, total variable expenses of $200,000, and fixed expense of $100,000, calculate the break even point in dollar sales.
$166,667
Classify the following as product/period: Research and Development Costs
Period
Your team is trying to decide whether to use machine hours or direct labor hours to allocate MOH. Because you took statistics, you plot some data points on a graph and find that DLH would have an r squared value of 0.97, and MH would have a value of 0.67. Which should you use to allocate MOH?
Direct Labor Hours
Your company has asked you to make some calculations to determine how well your company is doing. You find that your margin of safety percent is -2%, and that your Degree of Operating Leverage is -0.1. What would you tell your managers about these data points?
The company is doing poorly, as a negative margin of safety and negative degree of operating leverage indicate that the company is losing money.
Given a sales volume of 300, total sales of $500,000, total variable expenses of $200,000, and fixed expense of $100,000, calculate the break even point in units sold.
100 units
Your company generally uses $350,000 of MOH in a year, and estimates that the employees will complete 3400 direct labor hours. What is your POHR if the allocation base is DLH?
$103
Using the graph provided, approximately what is your break-even point in dollars?
$275,000
In order to make decisions, we need to determine which costs are ______ and which costs are _______.
irrelevant, relevant
Given a sales volume of 300, total sales of $500,000, total variable expenses of $200,000, and fixed expense of $100,000, calculate the degree of operating leverage.
DOL = contribution margin/NOI
1.5
Your estimated MOH is $5 per direct labor hour. Your team completes 3 jobs - one takes 18 hours, one takes 19 hours, and one takes 15 hours. What is the total MOH cost for these three jobs?
$260
Using the graph provided, approximately what is the break-even point in units sold?
25,000 units (sales volume)
Name two of the four purposes of managerial accounting.
Preparing financial statements, predicting cost behavior, making decisions, assigning costs to cost objects