Greek Manufacturing Company produces and sells a line of product that are sold usually all year round. The company has a maximum production capacity of 100,000 units per year. Operating at normal capacity, the business earned Operating Income of $600,000 in 2020. The following cost data has been prepared for the year ended December 31, 2020. Selling price per unit.. Production Costs: Direct Materials $50.00 $10.00 Direct Labour $8.00 Variable Manufacturing Overhead Fixed Manufacturing Overhead... Fixed Selling & Administrative Expenses.. Variable selling expense per unit .. $7.00 $450,000 $300,000 $10.00 Required: a) Using the equation method, calculate the normal capacity of the business. Calculate: ) the variable production cost per unit ii) the total production cost per unit lii) The total variable cost per unit Iv) Total Fixed Costs b) c) Calculate Greek's break-even point in units and in sales dollars. d) Assuming sales equal to the normal capacity calculated in a) above, prepare a contribution margin income statement for the year ended December 31, 2020, detailing the components of total variable costs and total fixed costs, and clearly showing contribution and net income.

Greek Manufacturing Company produces and sells a line of product that are sold usually all year round. The company has a maximum production capacity of 100,000 units per year. Operating at normal capacity, the business earned Operating Income of $600,000 in 2020. The following cost data has been prepared for the year ended December 31, 2020. Selling price per unit.. Production Costs: Direct Materials $50.00 $10.00 Direct Labour $8.00 Variable Manufacturing Overhead Fixed Manufacturing Overhead... Fixed Selling & Administrative Expenses.. Variable selling expense per unit .. $7.00 $450,000 $300,000 $10.00 Required: a) Using the equation method, calculate the normal capacity of the business. Calculate: ) the variable production cost per unit ii) the total production cost per unit lii) The total variable cost per unit Iv) Total Fixed Costs b) c) Calculate Greek's break-even point in units and in sales dollars. d) Assuming sales equal to the normal capacity calculated in a) above, prepare a contribution margin income statement for the year ended December 31, 2020, detailing the components of total variable costs and total fixed costs, and clearly showing contribution and net income.

Name: Greek Manufacturing Company produces and sells a line of product that
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Description: Greek Manufacturing Company produces and sells a line of product that are sold usually all year round. Thecompany has a maximum production capacity of 100,000 units per year. Operating at normal capacity, thebusiness earned Operating Income of $600,

Principles of Cost Accounting

17th Edition

ISBN:9781305087408

Author:Edward J. Vanderbeck, Maria R. Mitchell

Publisher:Edward J. Vanderbeck, Maria R. Mitchell

Chapter10: Cost Analysis For Management Decision Making

Section: Chapter Questions

Problem 8P: The production of a new product required Zion Manufacturing Co. to lease additional plant...

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Greek Manufacturing Company produces and sells a line of product that are sold usually all year round. The company has a maximum production capacity of 100,000 units per year. Operating at normal capacity, the business earned Operating Income of $600,000 in 2020. The following cost data has been prepared for the year ended December 31, 2020. Selling price per unit... $50.00 Production Costs: Direct Materials ... $10.00 ........ Direct Labour . $8.00 ........ Variable Manufacturing Overhead. $7.00 Fixed Manufacturing Overhead.... Fixed Selling & Administrative Expenses... Variable selling expense per unit ... $450,000 $300,000 ...... ..... $10.00 Required: a) Using the equation method, calculate the normal capacity of the business. b) Calculate: i) the variable production cost per unit ii) the total production cost per unit iii) The total variable cost per unit iv) Total Fixed Costs c) Calculate Greek's break-even point in units and in sales dollars. d) Assuming sales equal to the…
Greek Manufacturing Company produces and sells a line of product that are sold usually all year round. The company has a maximum production capacity of 100,000 units per year. Operating at normal capacity, the business earned Operating Income of $600,000 in 2020. The following cost data has been prepared for the year ended December 31, 2020. Selling price per unit.. $50.00 Production Costs: Direct Materials $10.00 Direct Labour $8.00 Variable Manufacturing Overhead $7.00 Fixed Manufacturing Overhead.... $450,000 .. .. Fixed Selling & Administrative Expenses.... $300,000 Variable selling expense per unit $10.00 d) Assuming sales equal to the normal capacity calculated in a) above, prepare a contribution margin income statement for the year ended December 31, 2020, detailing the components of total variable costs and total fixed costs, and clearly showing contribution and net income. e) The recession in the economy in 2021 is expected to result in a reduction of the number of units sold.…