Chillmax Company plans to sell 3,500 pairs of casual shoes at $60 each in the coming year. Product costs include: Direct materials per pair $ 12 Direct labor per pair 4 Variable factory overhead per 2 pair Total fixed factory overhead 30,000 Variable selling expense is a commission of $3 per pair; fixed selling and administrative expense totals $48,000. Required: 1. Calculate the total variable cost per unit. 2. Calculate the total fixed expense for the year. 3. Prepare a contribution margin income statement for Chillmax Company for the coming year. Enter all amounts as a positive number. Chillmax Company Contribution Margin Income Statement For the Coming Year Total Per Unit Sales Total variable cost Total contribution margin Total fixed cost Operating income

Chillmax Company plans to sell 3,500 pairs of casual shoes at $60 each in the coming year. Product costs include: Direct materials per pair $ 12 Direct labor per pair 4 Variable factory overhead per 2 pair Total fixed factory overhead 30,000 Variable selling expense is a commission of $3 per pair; fixed selling and administrative expense totals $48,000. Required: 1. Calculate the total variable cost per unit. 2. Calculate the total fixed expense for the year. 3. Prepare a contribution margin income statement for Chillmax Company for the coming year. Enter all amounts as a positive number. Chillmax Company Contribution Margin Income Statement For the Coming Year Total Per Unit Sales Total variable cost Total contribution margin Total fixed cost Operating income

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter7: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 29BEB: Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in...

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Sales Needed to Earn Target Income Chillmax Company plans to sell 3,500 pairs of shoes at 60 each in the coming year. Variable cost is 35% of the sales price; contribution margin is 65% of the sales price. Total fixed cost equals 78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the sales revenue that Chillmax must make to earn operating income of 81,900 by using the point in sales equation. 2. Check your answer by preparing a contribution margin income statement based on the sales dollars calculated in Requirement 1.
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Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Fixed factory overhead is $30,000 and fixed selling and administrative expense is $48,000. Required: 1. Calculate the variable cost ratio. % 2. Calculate the contribution margin ratio. 3. Prepare a contribution margin income statement based on the budgeted figures for next year. In a column next to the income statement, show the percentages based on sales for sales, total variable cost, and total contribution margin. Enter amounts as positive numbers. Chillmax Company Contribution Margin Income Statement For the Coming Year Percent of Sales Sales Total variable cost Total contribution margin Total fixed cost Operating income
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Break-Even Point in Units Chillmax Company plans to sell 3,500 pairs of shoes at $60 each in the coming year. Unit variable cost is $21 (includes direct materials, direct labor, variable factory overhead, and variable selling expense). Total fixed cost equals $78,000 (includes fixed factory overhead and fixed selling and administrative expense). Required: 1. Calculate the break-even pairs of shoes. $ 2. Check your answer by preparing a contribution margin income statement based on the break-even units. Enter all amounts as a positive number. Chillmax Company Contribution Margin Income Statement At Break-Even Point Total Sales Total variable cost Total contribution margin Total fixed cost Operating come
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Problem 3.Variable Cost Ratio, Contribution Margin Ratio Head-First Company plans to sell 5,000 bicycle helmets at $75 each in the coming year. The unit variable cost is $45 (includes direct materials, direct labor, variable factory overhead, and variable sellingexpense). Fixed factory overhead is $20,000 and fixed selling and administrative expense are $29,500.Required:1. Calculate the variable cost ratio.2. Calculate the contribution margin ratio.3. Prepare a contribution margin income statement based on the budgeted figures for nextyear. In a column next to the income statement, show the percentages based on sales forsales, the total variable cost, and the total contribution margin.
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