ACCT 346 Week 4 Homework (graded)

1. Active Equipment produces high-quality basketballs. If the fixed cost per basketball is $3 when the company produces 24,000 basketballs, what is the fixed cost per basketball when it produces 36,00 0 basketballs? Assume both volumes are in the same relevant range. Identify the formula, then compute the new fixed cost per basketball when it produces 36,000 basketballs. New fixed cost / = per basketball / = 2. Pamela's Quilt Shoppe sells homemade Amish quilts. Pamela buys the quilts from local Amish artisans for $270 each, & her shop sells them for $470 each. She also pays a sales commission of 6% of sales revenue to her sales staff. Pamela leases her country-style shop for $1,400 per month & pays $2,100 per month in payroll costs in addition to the sales commissions. Pamela sold 100 quilts in February. Prepare Pamela's traditional income statement & contribution margin income statement for the month. Prepare the traditional income statement for the month. Pamela's Quilt Shoppe Income Statement For the Month Ended February 28 Less: Operating expenses Sales commissions $ 2,820 Payroll costs 2,100 Lease 1,400 Prepare the contribution margin income statement for the month. Pamela's Quilt Shoppe Contribution Margin Income Statement For the Month Ended February 28 This s tSudaylessourrecevweansudeownloaded by from CourseH er$ on 4097-,:04:22 GMT -05:00