Contribution Margin Income Statement Per Unit $ 6.00 For Year Ended December 31 Sales (470,000 units) Variable costs Direct materials Direct labor Variable overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income 1.51 0.39 0.60 3.50 0.30 0.25 $ 2.95 Annual Total $ 2,820,000 709,700 183,300 282,000 1,645,000 141,000 117,500 $ 1,386,500
Contribution Margin Income Statement Per Unit $ 6.00 For Year Ended December 31 Sales (470,000 units) Variable costs Direct materials Direct labor Variable overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income 1.51 0.39 0.60 3.50 0.30 0.25 $ 2.95 Annual Total $ 2,820,000 709,700 183,300 282,000 1,645,000 141,000 117,500 $ 1,386,500
Chapter5: Process Costing
Section: Chapter Questions
Problem 1PB: The following product costs are available for Stellis Company on the production of erasers: direct...
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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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![JART manufactures and sells underwater markers. Its contribution margin income statement follows.
Contribution Margin Income Statement
Per Unit
$ 6.00
For Year Ended December 31
Sales (470,000 units)
Variable costs
Direct materials
Direct labor
Variable overhead
Contribution margin
Fixed costs
Fixed overhead
Fixed general and administrative
Income
1.51
0.39
0.60
3.50
0.30
0.25
$ 2.95
Annual Total
$ 2,820,000
709,700
183,300
282,000
1,645,000
Required:
1. Compute income from the special offer.
2. Should the company accept or reject the special offer?
141,000
117,500
$ 1,386,500
A potential customer offers to buy 57,000 units for $2.90 each. These sales would not affect the company's sales through its normal
channels. Details about the special offer follow.
Direct materials cost per unit and variable overhead cost per unit would not change.
• Direct labor cost per unit would be $0.50 because the offer would require overtime pay.
• Accepting the offer would require incremental fixed general and administrative costs of $5,700.
• Accepting the offer would require no incremental fixed overhead costs.](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F05d8efe4-522f-48b0-8065-164acfa798ac%2F1af53fea-5988-48bc-8b28-31ef6b2e5648%2F9tdj4ub_processed.png&w=3840&q=75)
Transcribed Image Text:JART manufactures and sells underwater markers. Its contribution margin income statement follows.
Contribution Margin Income Statement
Per Unit
$ 6.00
For Year Ended December 31
Sales (470,000 units)
Variable costs
Direct materials
Direct labor
Variable overhead
Contribution margin
Fixed costs
Fixed overhead
Fixed general and administrative
Income
1.51
0.39
0.60
3.50
0.30
0.25
$ 2.95
Annual Total
$ 2,820,000
709,700
183,300
282,000
1,645,000
Required:
1. Compute income from the special offer.
2. Should the company accept or reject the special offer?
141,000
117,500
$ 1,386,500
A potential customer offers to buy 57,000 units for $2.90 each. These sales would not affect the company's sales through its normal
channels. Details about the special offer follow.
Direct materials cost per unit and variable overhead cost per unit would not change.
• Direct labor cost per unit would be $0.50 because the offer would require overtime pay.
• Accepting the offer would require incremental fixed general and administrative costs of $5,700.
• Accepting the offer would require no incremental fixed overhead costs.
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