Exercise 2-8: 1) Units Produced and Sold 2) Parker Company 60,000 80,000 100,000 Contribution Format Income Statement
Total Costs: Current period Variable Costs 150,000 $200,000 250,000 Fixed Costs 360,000 360,000 360,000 Sales ( 90,000 x $7.50) $675,000
Total Costs: 510,000 $560,000 $610,000 Variable costs (90,000 x $2.50) $225,000 Contribution margin $450,000
Costs per unit: Fixed costs $360,000 Variable Cost $2.50 $2.50 $2.50 Net operating income $90,000 Fixed Cost $6.00 $4.50 $3.60
Total Cost per unit $8.50 $7.00 $6.10

Note: The exercise didn't not provide enough information to break down the variable and fixed costs to its components such as cost of goods sold, selling, and administrative expenses

Exercise 2-13: 2)
1) X-Ray Taken X-Ray Cost X = 4,600 x-rays taken
High activity level ( February) 7,000 $29,000
Low activity level ( June) 3,000 $17,000 Therefore, Y = $ 8,000 + ( 3 x 4,600)
Change 4,000 $12,000 Y = $ 8,000 + $13,800 Y = $21,800
Variable Cost per unit = change in cost / change in activity = 12,000 / 4,000 = $3.00 per x-ray Fixed cost element = Total cost - Variable cost element or, Thus, Y = $8,000 + $3.00 X
Fixed cost element = $29,000 - ( $3.00 x 7,000 x-rays) 17,000 - ( 3.00 x 3,000) where, Y = total cost
Fixed cost element = $29,000 - $21,000 17,000 - 9,000 X = quantity of x-rays
Fixed cost element = $ 8,000 8,000