A company produced and sold 3,400 units of its only product this year. The sales price is $162 per unit. Fixed costs include overhead of $85,000 per year, and selling and administrative expenses of $68,000 per year. Variable costs per unit follow. Direct materials Direct labor Variable overhead Variable selling and administrative expenses Use variable costing to compute contribution margin. Variable expenses Contribution Margin (Variable Costing) $ 28 per unit $ 30 per unit $5 per unit $4 per unit

A company produced and sold 3,400 units of its only product this year. The sales price is $162 per unit. Fixed costs include overhead of $85,000 per year, and selling and administrative expenses of $68,000 per year. Variable costs per unit follow. Direct materials Direct labor Variable overhead Variable selling and administrative expenses Use variable costing to compute contribution margin. Variable expenses Contribution Margin (Variable Costing) $ 28 per unit $ 30 per unit $5 per unit $4 per unit

Name: A company produced and sold 3,400 units of its only product this year
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Description: A company produced and sold 3,400 units of its only product this year. The sales price is $162 per unit. Fixed costs include overheadof $85,000 per year, and selling and administrative expenses of $68,000 per year. Variable costs per unit follow.Dir

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Concept explainers

Variance Analysis

In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.

Standard Costing

The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.

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Question

A company produced and sold 3,400 units of its only product this year. The sales price is $162 per unit. Fixed costs include overhead
of $85,000 per year, and selling and administrative expenses of $68,000 per year. Variable costs per unit follow.
Direct materials
Direct labor
Variable overhead
Variable selling and administrative expenses
Use variable costing to compute contribution margin.
Variable expenses
Contribution Margin (Variable Costing)
$ 28 per unit
$ 30 per unit
$5 per unit
34 per unit

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