# CVP analysis

Complete the following three questions using Microsoft Excel. No other submission format is allowed. Review the grading rubric to confirm you are meeting the assignment requirements. Problem 1 Milwaukee Dairy Company produces cream, whole milk, and 2% milk. The joint cost of producing the three products is SAR 30,000. The split-off quantities and selling prices of each product are as follows: Split-off Quantity (Gallons) Price at Split off (SAR) Cream 550 19.00 Whole milk 4,000 13.00 2% milk 1,200 6.50 Required: Calculate how much of the joint costs should be allocated to each product using the market value at split off method. Problem 2 The following information pertains to Delicious Bakery Company: GIVEN: Janitorial Dept. Cafeteria Dept. Mixing Dept. Baking Dept. Square feet 420 820 2800 2500 Number of employees 12 25 65 120 Department cost (SAR) 620,000 1,200,000 3,200,000 4,200,000 Required: Allocate Janitorial and Cafeteria department costs to mixing and baking departments using the Direct method. Use square feet for allocating janitorial costs and number of employees for allocating cafeteria department costs. Problem 3 Maintenance Hours Maintenance Cost (SAR) January 2,400 33,000 February 1,700 28,000 March 2,700 31,000 April 1,300 17,000 May 1,500 23,000 June 2,150 26,000 Required: Problem 4 Given the following: Total (SAR) Sales (40,000 units) 4,600,000 Variable expenses 2,700,000 Contribution margin 1,900,000 Fixed expenses 1,250,000 Net operating income 650,000 Required: Management is considering increasing the quality of its units by spending SAR 5 more per unit in variable costs and increasing advertising by SAR 80,000. Management believes these changes will increase unit sales by 20% at the same price. Calculate variable cost per unit using the high-low method. Calculate fixed costs. Calculate estimated costs at 2,700 maintenance hours. Calculate variable expense ratio Calculate contribution margin ratio Calculate break even sales in Units Calculate break even sales in SAR How many units must be sold to make a profit of 300,000 SAR? Calculate the new operating profit or loss. Calculate the new operating profit or loss. Explain whether management should make the change and why or why not. Calculate variable cost per unit using the high-low method.
Calculate fixed costs.
Calculate estimated costs at 2,700 maintenance hours. Calculate variable expense ratio
Calculate contribution margin ratio
Calculate break even sales in Units
Calculate break even sales in SAR
How many units must be sold to make a profit of 300,000 SAR? Calculate the new operating profit or loss. Explain whether management should make the change and why or why not.

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