ABC Manufacturing produces metal lampposts. The company's income statements for the last two years are given below. The company has no beginning or ending inventories. Last Year This Year Units sold. 60,000 85,000 Sales. 1,440,000. 2,040,000 Less cost of goods sold. 785,000 1,060,000 Gross margin 655,000 980,000 Less operating expenses. 237,000 312,000 Net income 418,000. 668,000 Using the high/low method, determine the company's total variable cost per unit.

ABC Manufacturing produces metal lampposts. The company's income statements for the last two years are given below. The company has no beginning or ending inventories. Last Year This Year Units sold. 60,000 85,000 Sales. 1,440,000. 2,040,000 Less cost of goods sold. 785,000 1,060,000 Gross margin 655,000 980,000 Less operating expenses. 237,000 312,000 Net income 418,000. 668,000 Using the high/low method, determine the company's total variable cost per unit.

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter2: Basic Cost Management Concepts

Section: Chapter Questions

Problem 22E: Ellerson Company provided the following information for the last calendar year: During the year,...

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ABC Manufacturing produces metal lampposts. The company's income statements for the last two years are given below. The company has no beginning or ending inventories. Last Year This YearUnits sold. 60,000 85,000Sales. 1,440,000. 2,040,000Less cost of goods sold. 785,000 1,060,000 Gross margin 655,000 980,000Less operating expenses. 237,000 312,000Net income 418,000. 668,000 Compute the company's contribution margin for this year. a) 900,000b) 790,000c) 715,000d) 850,000
ABC Manufacturing produces metal lampposts. The company's income statements for the last two years are given below. The company has no beginning or ending inventories. Last Year This YearUnits sold. 60,000 85,000Sales. 1,440,000. 2,040,000Less cost of goods sold. 785,000 1,060,000 Gross margin 655,000 980,000Less operating expenses. 237,000 312,000Net income 418,000. 668,000 Determine the company's total fixed costs. a) 182,000b) 125,000c) 205,700d) 162,500
ABC Manufacturing produces metal lampposts. The company's income statements for the last two years are given below. The company has no beginning or ending inventories. Last year 60,000 This year 85,000 $2,040,000 Units sold Sales $1,440,000 Less cost of goods sold Gross margin Less operating expenses 785,000 1,060,000 655,000 980,000 237,000 312,000 Net income $418.000 $668.000 Using the high/low method, determine the company's total variable cost per unit. O $15.50 per unit O $12 per unit O $11.75 per unit O $14 per unit
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The following information relates to the Jasmine Company for the upcoming year, based on 424,000 units: Amount Per Unit Sales $ 8,480,000 $ 68.00 Cost of goods sold 6,784,000 40.00 Gross margin 1,696,000 28.00 Operating expenses 960,000 7.50 Operating profits $ 736,000 $ 20.50 The cost of goods sold includes $2,289,600 of fixed manufacturing overhead; the operating expenses include $281,600 of fixed marketing expenses. A special order offering to buy 74,000 units for $19.80 per unit has been made to Jasmine. Fortunately, there will be no additional fixed costs associated with the order and Jasmine has sufficient capacity to handle the order. How much will operating profits increase if Jasmine accepts the special order? Multiple Choice $185,000 $74,000 $562,400 $370,000
Sheridan Inc. had a bad year in 2021. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 73,600 units of product: net sales $1,840,000; total costs and expenses $2,056,200; and net loss $216,200, Costs and expenses consisted of the following. Cost of goods sold Selling expenses Administrative expenses 1. 2. 3. Break-even point 1. 2. $1,442,560 3. Total $ 475,640 Management is considering the following independent alternatives for 2022. 138,000 $2,056,200 Increase selling price Change compensation Purchase machinery (a) Compute the break-even point in sales dollars for 2021. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answer to O decimal places, e.g. 2,510.) Variable Increase unit selling price 25% with no change in costs and expenses. Change the compensation of salespersons from fixed annual salaries totaling $184,000 to total salaries of $36,800 plus a 5% commission on net…
Hernando Manufacturing, Inc. reported the following information for the year: Number of Units Produced $152,000 Number of Units Sold 62,000 Cost of Goods Manufactured 268,000 Cost of Goods Sold 52,900 Sales Revenue 130,000 Gross Profit 72,940 Operating Expense 727,000 What was the unit product cost? (Round your answer to the nearest cent.) A. $1.76 B. $0.85 C. $0.86 D. $4.32
esc Wildhorse Inc. had a bad year in 2021. For the first time in its history, it operated at a loss. The company's income statement showed the following results from selling 104,000 units of product: net sales $2,600,000; total costs and expenses $2,905,500; and net loss $305,500. Costs and expenses consisted of the following. Cost of goods sold Selling expenses Administrative expenses 1. 2. 3. Break-even point $ 1. 2. $2,038,400 Total 672,100 195,000 $2,905,500 Management is considering the following independent alternatives for 2022. 3. Purchase machinery 1 F1 Increase selling price $ Change compensation $ 72 Variable $1,365,000 Increase unit selling price 25% with no change in costs and expenses. Change the compensation of salespersons from fixed annual salaries totaling $260,000 to total salaries of $52,000 plus a 5% commission on net sales. (a) Compute the break-even point in sales dollars for 2021. (Round contribution margin ratio to 4 decimal places e.g. 0.2512 and final answer…