Burchard Company sold 41,000 units of its only product for $17.20 per unit this year. Manufacturing and selling the product required $312,000 of fixed costs. Its per unit variable costs follow. Direct materials Direct labor Variable overhead costs Variable selling and administrative costs For the next year, management will use a new material, which will reduce direct materials costs to $1.84 per unit and reduce direct labor costs to $2.16 per unit. Sales, total fixed costs, variable overhead costs per unit, and variable selling and administrative costs per unit will not change. Management is also considering raising its selling price to $21.50 per unit, which would decrease unit sales volume to 36,900 units. Problem 5-5A (Algo) Part 2 2. Prepare a contribution margin income statement for next year with two columns showing the expected results of (a) using the new material and (b) using the new material and increasing the selling price. BURCHARD COMPANY Contribution Margin Income Statement Number of units: With new material S 41,000 $4.60 3.60 0.46 0.26 0 With new material and price increase 36,900 0 S 0
Burchard Company sold 41,000 units of its only product for $17.20 per unit this year. Manufacturing and selling the product required $312,000 of fixed costs. Its per unit variable costs follow. Direct materials Direct labor Variable overhead costs Variable selling and administrative costs For the next year, management will use a new material, which will reduce direct materials costs to $1.84 per unit and reduce direct labor costs to $2.16 per unit. Sales, total fixed costs, variable overhead costs per unit, and variable selling and administrative costs per unit will not change. Management is also considering raising its selling price to $21.50 per unit, which would decrease unit sales volume to 36,900 units. Problem 5-5A (Algo) Part 2 2. Prepare a contribution margin income statement for next year with two columns showing the expected results of (a) using the new material and (b) using the new material and increasing the selling price. BURCHARD COMPANY Contribution Margin Income Statement Number of units: With new material S 41,000 $4.60 3.60 0.46 0.26 0 With new material and price increase 36,900 0 S 0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
Related questions
Question
Do not give solution in image
![suon mun
Burchard Company sold 41,000 units of its only product for $17.20 per unit this year. Manufacturing and selling the product
required $312,000 of fixed costs. Its per unit variable costs follow.
Direct materials.
Direct labor
Variable overhead costs
Variable selling and administrative costs
For the next year, management will use a new material, which will reduce direct materials costs to $1.84 per unit and
reduce direct labor costs to $2.16 per unit. Sales, total fixed costs, variable overhead costs per unit, and variable selling
and administrative costs per unit will not change. Management is also considering raising its selling price to $21.50 per
unit, which would decrease unit sales volume to 36,900 units.
Problem 5-5A (Algo) Part 2
2. Prepare a contribution margin income statement for next year with two columns showing the expected results of (a) using the new
material and (b) using the new material and increasing the selling price.
BURCHARD COMPANY
Contribution Margin Income Statement
With new material
Number of units:
$
41,000
0
$ 4.60
3.60
0.46
0.26
With new
material and
price increase
0 $
36,900
0
0](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F756650b3-18d1-4b86-ac9b-c71ad5c7bd76%2F728c82db-d776-4e5a-b23f-61c824791595%2Fgpuexc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:suon mun
Burchard Company sold 41,000 units of its only product for $17.20 per unit this year. Manufacturing and selling the product
required $312,000 of fixed costs. Its per unit variable costs follow.
Direct materials.
Direct labor
Variable overhead costs
Variable selling and administrative costs
For the next year, management will use a new material, which will reduce direct materials costs to $1.84 per unit and
reduce direct labor costs to $2.16 per unit. Sales, total fixed costs, variable overhead costs per unit, and variable selling
and administrative costs per unit will not change. Management is also considering raising its selling price to $21.50 per
unit, which would decrease unit sales volume to 36,900 units.
Problem 5-5A (Algo) Part 2
2. Prepare a contribution margin income statement for next year with two columns showing the expected results of (a) using the new
material and (b) using the new material and increasing the selling price.
BURCHARD COMPANY
Contribution Margin Income Statement
With new material
Number of units:
$
41,000
0
$ 4.60
3.60
0.46
0.26
With new
material and
price increase
0 $
36,900
0
0
Expert Solution
![](/static/compass_v2/shared-icons/check-mark.png)
This question has been solved!
Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.
This is a popular solution!
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
![Blurred answer](/static/compass_v2/solution-images/blurred-answer.jpg)
Recommended textbooks for you
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![FINANCIAL ACCOUNTING](https://compass-isbn-assets.s3.amazonaws.com/isbn_cover_images/9781259964947/9781259964947_smallCoverImage.jpg)
![Accounting](https://www.bartleby.com/isbn_cover_images/9781337272094/9781337272094_smallCoverImage.gif)
Accounting
Accounting
ISBN:
9781337272094
Author:
WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:
Cengage Learning,
![Accounting Information Systems](https://www.bartleby.com/isbn_cover_images/9781337619202/9781337619202_smallCoverImage.gif)
Accounting Information Systems
Accounting
ISBN:
9781337619202
Author:
Hall, James A.
Publisher:
Cengage Learning,
![Horngren's Cost Accounting: A Managerial Emphasis…](https://www.bartleby.com/isbn_cover_images/9780134475585/9780134475585_smallCoverImage.gif)
Horngren's Cost Accounting: A Managerial Emphasis…
Accounting
ISBN:
9780134475585
Author:
Srikant M. Datar, Madhav V. Rajan
Publisher:
PEARSON
![Intermediate Accounting](https://www.bartleby.com/isbn_cover_images/9781259722660/9781259722660_smallCoverImage.gif)
Intermediate Accounting
Accounting
ISBN:
9781259722660
Author:
J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:
McGraw-Hill Education
![Financial and Managerial Accounting](https://www.bartleby.com/isbn_cover_images/9781259726705/9781259726705_smallCoverImage.gif)
Financial and Managerial Accounting
Accounting
ISBN:
9781259726705
Author:
John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:
McGraw-Hill Education