Parker Corp. planned and manufactured 150,000 units of its product in 2024, its first operating year. The costs were: ⚫ Variable manufacturing costs: $25 per unit ⚫ Fixed manufacturing costs: $450,000 ⚫ Marketing and administrative costs: $300,000 Parker sold 90,000 units at $35 per unit. What is Parker's 2024 operating income using absorption costing? a. $375,000 b. $450,000 c. $525,000 d. $330,000

Parker Corp. planned and manufactured 150,000 units of its product in 2024, its first operating year. The costs were: ⚫ Variable manufacturing costs: $25 per unit ⚫ Fixed manufacturing costs: $450,000 ⚫ Marketing and administrative costs: $300,000 Parker sold 90,000 units at $35 per unit. What is Parker's 2024 operating income using absorption costing? a. $375,000 b. $450,000 c. $525,000 d. $330,000

Managerial Accounting: The Cornerstone of Business Decision-Making

7th Edition

ISBN:9781337115773

Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger

Chapter5: Activity-based Costing And Management

Section: Chapter Questions

Problem 16MCQ: Suppose that a company is spending 60,000 per year for inspecting, 30,000 for purchasing, and 40,000...

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Schylar Pharmaceuticals, Inc., plans to sell 130,000 units of antibiotic at an average price of 22 each in the coming year. Total variable costs equal 1,086,800. Total fixed costs equal 8,000,000. (Round all ratios to four significant digits, and round all dollar amounts to the nearest dollar.) Required: 1. What is the contribution margin per unit? What is the contribution margin ratio? 2. Calculate the sales revenue needed to break even. 3. Calculate the sales revenue needed to achieve a target profit of 245,000. 4. What if the average price per unit increased to 23.50? Recalculate: a. Contribution margin per unit b. Contribution margin ratio (rounded to four decimal places) c. Sales revenue needed to break even d. Sales revenue needed to achieve a target profit of 245,000
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