Problem 21-2BContribution margin income statement and contribution margin ratioA1The following costs result from the production and sale of 12,000 LEGO sets manufactured by LEGO Company for the year ended December 31. The LEGO setssell for $20 each.Variable costsPlastic for LEGO setsWages of assembly workers...Labeling...Sales commissions...$ 3,00030,0003,0006,000Required1. Prepare a contribution margin income statement for the year.2. Compute contribution margin per unit and contribution margin ratio.Fixed costsRent on factory..Factory cleaning service....Factory machinery depreciationLease of office equipmentOffice staff salaries...Administrative salaries.Analysis Component3. For each dollar of sales, how much is left to cover fixed costs and contribute to income?$ 6,7504,52020,0001,05015,000120,000

Contribution margin is defined as the sales revenue left to cover the fixed costs incurred by the…

Answered: Problem 21-2B Contribution margin…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

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Exercise 19-9 (Algo) Absorption costing and variable costing income statements LO P2 Rey Company’s only product sells for $235 per unit. Data for its first year of operations follow. Direct materials $ 39 per unit Direct labor $ 47 per unit Variable overhead $ 5 per unit Fixed overhead $ 168,000 per year Variable selling and administrative expenses $ 37 per unit Fixed selling and administrative expenses $ 238,000 per year Units produced and sold 24,000 units 1. Prepare an income statement for the year using absorption costing2. Prepare an income statement for the year using variable costing.
Question 2 Moon produces tow products the A and B. The direct costs of the two products are given below: Direct materials Direct Labour A £4.00 £3.00 Materials handling Production set up costs The budgeted production for 80,000 units of A and 30,000 units of B. The two main activities identified for the simple production process are material handling and production set ups. Product A requires large production runs and large transfers of materials from stores. However, product B is a more complex product with a number of different types of materials required and shorter and more frequent production runs. A Number Material Handling requisitions 100 Number of Production Set Ups 50 Required: B The budgeted fixed overheads of Caplan are £600,000 and they are made up as follows: £200,000 £400,000 £600,000 The use of these activities for each product is £4.20 £2.20 B 400 200 Total 500 250 Calculate the unit cost of each product using the costing method of Activity Based Costing.
QUESTION 7 Quiet Corp. currently makes 2000 subcomponents a year in one of its factories. The unit costs to produce are: Description Per unit Direct materials Direct labor Variable manufacturing overhead Fixed manufacturing overhead $4 4 2 IMI An outside supplier has offered to provide Quiet Corp. with the 2000 subcomponents at a $17 per unit price. Fixed overhead is not avoidable. If Quiet Corp. decides to buy from the outside supplier, the impact to net income will be ? If positive, enter the number, if negative, place a-sign before your number
Plz answer A,B&C
Question 23 Wrap-It Company, a manufacturer of wrapping paper, began operations on June 1 of the current year. During this time, the company produced 370,000 units and sold 310,000 units at a sales price of $50 per unit. Cost information for this period is shown in the following table: Production costs Direct materials Direct labor $2.00 per unit $.80 per unit Variable overhead $814,000 in total $481,000 in total Fixed overhead Nonproduction costs Variable selling and administrative $78,000 in total Fixed selling and administrative $210,000 in total a. Prepare Wrap-It's December 31 income statement for the current year under absorption costing. b. Prepare Wrap-It's December 31 income statement for the current year under variable costing. Edit Format Table F2 F4 F5 F6 F7 F8 F9 2 -0- @ 2 W S F3 0+ #M 3 חו E C 4 R % ы бо F T < 6 G Y 87 & H
Problem 17-2B Using plantwide overhead rate to allocate overhead cost, and compute overhead cost per unit and gross profit per unit P1 Sara's Salsa produces salsa in two types: Extra Fine for restaurants and Family Style for home use. The company budgets $280,000 of overhead cost and 40,000 direct labor hours. Additional information follows. Per Unit (case) Extra Fine Family Style Selling Price $64 53 Direct Materials $18 16 Direct Labor $30 25 Required 1. Compute a single plantwide overhead rate assuming the company allocates overhead cost based on 40,000 direct labor hours. 2. Extra Fine uses 2 direct labor hours per unit and Family Style uses 1.5 direct labor hours per unit. Compute the overhead cost per unit for each product. 3. Compute the product cost per unit for each product. 4. For each product, compute the gross profit per unit (selling price per unit minus the product cost per unit).
1 part 1
Exercise 18-13 (Algo) Computing sales to achieve target income LO C2 Sunn Company manufactures a single product that sells for $145 per unit and whose variable costs are $87 per unit. The company's annual fixed costs are $916,400. Management targets an annual income of $1,450,000. (1) Compute the unit sales to earn the target income. Numerator: 1 1 Denominator: (2) Compute the dollar sales to earn the target income. Numerator: 1 1 Denominator: = || = = || Units to Achieve Target Units to achieve target 0 Dollars to Achieve Target Dollars to achieve target 0
Exercises 4 Event Company produces a single product with the following characteristics: price per unit, $30.00; variable material cost per unit, $9.20; variable labor cost per unit, $4.40; variable overhead cost per unit, $2.20; and fixed overhead cost per unit, $3.00. Event Company's manufacturing fixed costs are $5 million, and selling, general, and administration fixed costs are $1.5 million. What dollar sales are required for Event Company to earn a target profit of $600,000? Exercises 5 The following information pertains to Torasic Company's budgeted income statement for the month of June: Sales (1,500 units at $300) $450,000 Variable cost 200,000 250,000 280,000 $(30,000) Contribution margin Fixed cost Net loss Required a) Determine the company's breakeven point in both units and dollars. b) The sales manager believes that a $25,000 increase in the monthly advertising expenses will result in a considerable increase in sales. How much of an increase in sales must result from…
Exercise 5-11A Allocating facility-level costs and a product elimination decision Blevins Boards produces two kinds of skateboards. Selected unit data for the two boards for the last quarter follow. Production costs Direct materials Direct labor Allocated overhead Total units produced and sold Total sales revenue Basco Boards Shimano Boards Required a. Compute the per-unit cost for each product. b. Compute the profit for each product. $25 $32 $15 5,000 $ 500,000 $38 $54 $18 10,000 $1,400,000 Blevins allocates production overhead using activity-based costing. It allocates delivery expense and sales commissions, which amount to $54,000 per quarter, to the two products equally.

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