I need help understanding the last 3 questions on my homework


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I need help understanding the last 3 questions on my homework this week from MGMT 312 M4 Review Questions Coursehero MGMT 312 M4 Review Questions.docx MGMT 312, VI. Module 4 Review Questions Contribution margin income statement and contribution margin ratio The following costs result from the production and sale of 4,000 drum sets manufactured by Vince Drum Company for the year ended December 31, 2013. The drum sets sell for $250 each. The company has a 25% income tax rate. 1) Prepare a contribution margin income statement for the company. 2) Compute its contribution margin per unit and its contribution margin ratio. Page 1 of 3 MGMT 312, VII. Module 4 Review Questions Break-even analysis, different cost structures, and income calculations Letter Co. produces and sells two products, T and O. It manufactures these products in separate factories and markets them through different channels. They have no shared costs. This year, the company sold 50,000 units of each product. Sales and costs for each product follow. 1) Compute the break-even point in dollar sales for each product. 2) Assume that the company expects sales of each product to decline to 33,000 units next year with no change in unit sales price. Prepare forecasted financial results for next year following the format of the contribution margin income statement as shown with columns for each of the two products (assume 32% tax rate). Also, assume that any loss before taxes yields a 32% tax savings. 3) Assume that the company expects sales of each product to increase to 64,000 units next year with no change in unit sales price. Prepare forecasted financial results for next year following the format of the contribution margin income statement shown with columns for each of the two products. (Assume a 32% tax rate.) Page 2 of 3 MGMT 312, VIII. Module 4 Review Questions Cost behavior estimation – high-low method The following information is available for a company’s maintenance cost over the last seven months. 1) Using the high-low method, estimate both the fixed and variable components of its maintenance cost. 2) Show the cost function formula for monthly maintenance costs. Page 3 of 3

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