Poleskiʼs controller would like to have the worksheet display an income statement in a contribution margin format (Sales – variable costs = contribution margin – fixed costs = net income).       CVP Cost-Volume-Profit Analysis       Data Section             Fixed Variable Production costs          Direct materials   $2.30      Direct labor   4.70      Factory overhead $225,000 3.00 Selling expenses          Sales salaries & commissions 97,000 0.75      Advertising 47,500        Miscellaneous selling expense 16,200   General expenses          Office salaries 92,000        Supplies 12,300 0.25      Miscellaneous general expense 15,000     $505,000 $11.00       Projected unit sales   120,000 Selling price per unit   $16.00       Target net income   $250,000       Answer Section           Contribution margin per unit    $5.00 Contribution margin ratio    31.25%       Break-even point in units   101,000 Units needed to achieve target net income   151,000       Break-even point in dollars   $1,616,000 Sales dollars needed to achieve target net income   $2,416,000       Net income based on projected unit sales (cell C22)   $95,000

FINANCIAL ACCOUNTING
10th Edition
ISBN:9781259964947
Author:Libby
Publisher:Libby
Chapter1: Financial Statements And Business Decisions
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Poleskiʼs controller would like to have the worksheet display an income statement in a contribution margin format (Sales – variable costs = contribution margin – fixed costs = net income).

     
CVP
Cost-Volume-Profit Analysis
     
Data Section    
     
  Fixed Variable
Production costs    
     Direct materials   $2.30
     Direct labor   4.70
     Factory overhead $225,000 3.00
Selling expenses    
     Sales salaries & commissions 97,000 0.75
     Advertising 47,500  
     Miscellaneous selling expense 16,200  
General expenses    
     Office salaries 92,000  
     Supplies 12,300 0.25
     Miscellaneous general expense 15,000  
  $505,000 $11.00
     
Projected unit sales   120,000
Selling price per unit   $16.00
     
Target net income   $250,000
     
Answer Section    
     
Contribution margin per unit    $5.00
Contribution margin ratio    31.25%
     
Break-even point in units   101,000
Units needed to achieve target net income   151,000
     
Break-even point in dollars   $1,616,000
Sales dollars needed to achieve target net income   $2,416,000
     
Net income based on projected unit sales (cell C22)   $95,000
     
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