Suppose that a and b are two numbers that satisfy a simultaneous equation

Question

1/       2b = a +7, (1)
2/       3a =2b - 1.

 

Give two options that are rearrangements of equation 1

Give two options that are rearrangements of equation  2

Answer 1

1).   2b = a +7

1a). a = 2b - 7

1b). b = (a + 7)/2

2).   3a =2b - 1

2a). a = (2b - 1)/3

2b). 2b = 3a + 1

to solve the equations plug 1a) into 2)

3(2b - 7) = 2b - 1

6b - 21 = 2b - 1

4b = 20

b = 5

plug this into 1). to find a =

2(5) = a + 7

10 - 7 = a

a = 3

Answer 2

Suppose that Adams Company sells a product for $20. Unit costs are as follows:

Direct materials $3.90

Direct labor 1.40

Variable factory overhead 2.10

Variable selling and administrative expense 1.60

Total fixed factory overhead is $52,000 per year, and total fixed selling and administrative

expense is $38,530.

Required:

1. Calculate the variable cost per unit and the contribution margin per unit.

2. Calculate the contribution margin ratio and the variable cost ratio.

3. Calculate the break-even units.

4. Prepare a contribution margin income statement at the break-even number of units.