Laila company has provided the following information about the company Sales $225,000 Sales Discount $20,000 Overhead cost (Fixed) $ 35,000 Overhead (Variable) $ 20,000 Sales Return /Allowance $2,500 Selling commission [variable ] $ 39,600 Supplies $2,600 Selling commission [fixed] $ 15,000 Prepaid expense $11,000 Variable admin expenses $ 24500 Accrued cost $7900 Fixed admin expenses $ 20,000 Tax 25% Interest expenses $5,420 Capacity of production 4,000 units Units sold 3,500 Units produced 3,500 Hint : all selling and admin costs are operating expenses REQUIRED 1. Calculate the net income using contribution approach 2. Calculate Net income using the absorption method [ Financial Accounting method] 3. Find CM per unit and the Contribution Margin Ratio
Laila company has provided the following information about the company
Sales $225,000
Sales Discount $20,000
Overhead cost (Fixed) $ 35,000
Overhead (Variable) $ 20,000
Sales Return /Allowance $2,500
Selling commission [variable ] $ 39,600
Supplies $2,600
Selling commission [fixed] $ 15,000
Prepaid expense $11,000
Variable admin expenses $ 24500
Accrued cost $7900
Fixed admin expenses $ 20,000
Tax 25%
Interest expenses $5,420
Capacity of production 4,000 units
Units sold 3,500
Units produced 3,500
Hint : all selling and admin costs are operating expenses
REQUIRED
1. Calculate the net income using contribution approach
2. Calculate Net income using the absorption method [ Financial
Accounting method]
3. Find CM per unit and the Contribution Margin Ratio
4. Determine the breakeven sales in units and dollars
5. Draw a graph to show the profit and lost and breakeven point for this
company [BE graph]
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