High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 45,000 Units sold 40,000 Selling price per unit $ 81 Selling and administrative expenses: Variable per unit $ 2 Fixed (per month) $ 561,000 Manufacturing costs: Direct materials cost per unit $ 15 Direct labor cost per unit $ 9 Variable manufacturing overhead cost per unit $ 2 Fixed manufacturing overhead cost (per month) $ 720,000 Management is anxious to assess the profitability of the new camp cot during the month of May. 2. Assume that the company uses variable costing. b. Prepare a contribution format income statement for May. Prepare a contribution format income statement for May. Assume that the company uses variable costing. High Country, Inc. Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold Fixed selling and administrative expenses 0 Contribution margin 0 0 $0
High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation: Beginning inventory 0 Units produced 45,000 Units sold 40,000 Selling price per unit $ 81 Selling and administrative expenses: Variable per unit $ 2 Fixed (per month) $ 561,000 Manufacturing costs: Direct materials cost per unit $ 15 Direct labor cost per unit $ 9 Variable manufacturing overhead cost per unit $ 2 Fixed manufacturing overhead cost (per month) $ 720,000 Management is anxious to assess the profitability of the new camp cot during the month of May. 2. Assume that the company uses variable costing. b. Prepare a contribution format income statement for May. Prepare a contribution format income statement for May. Assume that the company uses variable costing. High Country, Inc. Variable Costing Income Statement Sales Variable expenses: Variable cost of goods sold Fixed selling and administrative expenses 0 Contribution margin 0 0 $0
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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High Country, Inc., produces and sells many recreational products. The company has just opened a new plant to produce a folding camp cot that will be marketed throughout the United States. The following cost and revenue data relate to May, the first month of the plant’s operation:
Beginning inventory | 0 | |
Units produced | 45,000 | |
Units sold | 40,000 | |
Selling price per unit | $ | 81 |
Selling and administrative expenses: | ||
Variable per unit | $ | 2 |
Fixed (per month) | $ | 561,000 |
Direct materials cost per unit | $ | 15 |
Direct labor cost per unit | $ | 9 |
Variable manufacturing |
$ | 2 |
Fixed manufacturing overhead cost (per month) | $ | 720,000 |
Management is anxious to assess the profitability of the new camp cot during the month of May.
2. Assume that the company uses variable costing.
b. Prepare a contribution format income statement for May.
Prepare a contribution format income statement for May. Assume that the company uses variable costing.
|
|
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