1. Jimbob Co. is a merchandising company that buys and resells tires for rally race cars. The company's income statements for the last two years are given below: Units sold Sales Less cost of goods sold Gross margin Less operating expenses Net income Last year 2,200 $330,000 220,000 110,000 65,000 $45,000 The company has no beginning or ending inventories. This year 2,000 $300,000 200,000 100,000 60,000 $40,000 Required: a. Estimate the company's total variable cost per unit for operating expenses. b. What is the company's total of fixed costs per year? c. Compute the company's contribution margin for this year.

1. Jimbob Co. is a merchandising company that buys and resells tires for rally race cars. The company's income statements for the last two years are given below: Units sold Sales Less cost of goods sold Gross margin Less operating expenses Net income Last year 2,200 $330,000 220,000 110,000 65,000 $45,000 The company has no beginning or ending inventories. This year 2,000 $300,000 200,000 100,000 60,000 $40,000 Required: a. Estimate the company's total variable cost per unit for operating expenses. b. What is the company's total of fixed costs per year? c. Compute the company's contribution margin for this year.

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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