Last year, Blake's income under absorption costing was $4,400 lower than its income under variable costing. The company sold 11,000 units during the year, and its variable costs were $11 per unit, of which $2 variable selling expense. If production cost was $13 per unit under absorption costing, then how many units did the company produce during the year?

Last year, Blake's income under absorption costing was $4,400 lower than its income under variable costing. The company sold 11,000 units during the year, and its variable costs were $11 per unit, of which $2 variable selling expense. If production cost was $13 per unit under absorption costing, then how many units did the company produce during the year?

Cornerstones of Cost Management (Cornerstones Series)

4th Edition

ISBN:9781305970663

Author:Don R. Hansen, Maryanne M. Mowen

Publisher:Don R. Hansen, Maryanne M. Mowen

Chapter16: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 36P: Faldo Company produces a single product. The projected income statement for the coming year, based...

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Faldo Company produces a single product. The projected income statement for the coming year, based on sales of 200,000 units, is as follows: Required: 1. Compute the unit contribution margin and the units that must be sold to break even. Suppose that 30,000 units are sold above the break-even point. What is the profit? 2. Compute the contribution margin ratio and the break-even point in dollars. Suppose that revenues are 200,000 greater than expected. What would the total profit be? 3. Compute the margin of safety in sales revenue. 4. Compute the operating leverage. Compute the new profit level if sales are 20 percent higher than expected. 5. How many units must be sold to earn a profit equal to 10 percent of sales? 6. Assume the income tax rate is 40 percent. How many units must be sold to earn an after-tax profit of 180,000?
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Lavender Company’s income under absorption costing was P 3,600 lower than its income under variable costing. The company sold 10,000 units during the year, and its variable costs were P 9 per unit, P 1 of which represents the variable selling expense. If production cost was P 11 per unit under absorption costing, then how many units did the company produce during the year?
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Last month the Blank Inc. had sales of 5,000 units sold for P40 each. The total variable expenses were P120,000, and fixed costs were P65,000. Required: a. What is the company’s contribution margin (CM) ratio? b. Estimate the change in the company’s net operating income if it were to increase its total sales by P8,000.
Bent Tree incurred the following unit costs during the year: variable manufacturing cost, $27; fixed manufacturing cost, $10; variable marketing and administrative cost, $8; and fixed marketing and administrative cost, $6. During the year, Bent Tree produced 30,000 units and sold 25,000 units of product. The selling price was $67 per unit. What was Bent Tree's total gross margin?
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