Exercise 3-4A (Algo) Determining variable cost from incomplete cost data LO 3-1 Baird Corporation produced 215,000 watches that it sold for $19 each during year 2. The company determined that fixed manufacturing cost per unit was $8 per watch. The company reported a $1,075,000 gross margin on its year 2 financial statements. Required Determine the variable cost per unit, the total variable cost, and the total contribution margin. Variable cost per unit Total variable cost Total contribution margin

Exercise 3-4A (Algo) Determining variable cost from incomplete cost data LO 3-1 Baird Corporation produced 215,000 watches that it sold for $19 each during year 2. The company determined that fixed manufacturing cost per unit was $8 per watch. The company reported a $1,075,000 gross margin on its year 2 financial statements. Required Determine the variable cost per unit, the total variable cost, and the total contribution margin. Variable cost per unit Total variable cost Total contribution margin

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exercise 11-15A (Algo) Using contribution margin format income statement to measure the magnitude of operating leverage LO 11-3, 11-4 The following income statement was drawn from the records of Benson, a merchandising firm: BENSON COMPANY Income Statement For the Year Ended December 31 Sales revenue (4,500 units × $163) $ 733,500 Cost of goods sold (4,500 units × $82) (369,000 ) Gross margin 364,500 Sales commissions (5% of sales) (36,675 ) Administrative salaries expense (85,000 ) Advertising expense (34,000 ) Depreciation expense (48,000 ) Shipping and handling expenses (4,500 units × $3) (13,500 ) Net income $ 147,325 Required Reconstruct the income statement using the contribution margin format. Calculate the magnitude of operating leverage. Use the measure of operating leverage to determine the amount of net income Benson will earn if sales increase by 20 percent.
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High-Low Method The manufacturing costs of Ackerman Industries for the first three months of the year follow: Total Costs Units Produced January $219,590 2,710 units February 168,480 1,680 March 262,080 4,080 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. Round all answers to the nearest whole dollar. a. Variable cost per unit $ b. Total fixed cost
High-Low Method The manufacturing costs of Rosenthal Industries for the first three months of the year follow: Total Costs Production January $75,240 855 units February 86,530 1,700 March 117,040 2,755 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. a. Variable cost per unit $fill in the blank 1 b. Total fixed cost $fill in the blank 2
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