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Problem 2 Cortez Company makes two types of backpacks. Data for the company's activity...

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Accounting

Problem 2
Cortez Company makes two types of backpacks. Data for the company's activity during a
typical month are presented below:
The company's fixed expenses are $80,000.
Required:
(a) Determine the overall company contribution margin ratio.
(b) Determine the break-even point for the company in terms of sales dollars if the sales mix
remains constant.
(c) Find the margin of safety in terms of sales dollars.
(d) If the sales mix is changed to 60,000 units of the school model and 20,000 units of the
hiker model, find the break-even point in terms of sales dollars.
Problem 3
Jackson Company operates a cafeteria for its employees. The number of meals served each week
over the last seven weeks, along with the total costs of operating the cafeteria are given below:
Assume that the relevant range includes all of the activity levels mentioned in this problem.
Required:
(a) Using the high-low method of analysis, calculate the variable cost per meal served for ia
cafeteria costs.
(b) Calculate the fixed cost of the cafeteria.
(c) Construct a cost formula for total cafeteria costs.
(d) Estimate the total cafeteria costs to be incurred by Jackson Company if 1,720 meals are
served.
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