Question: Shamrock Inc. makes an oak desk specially designed for personal computers. The desk sells for $200. Data for last year's operations follows: Units in beginning inventory 0 Units produced 10,000 Units sold 9,000 Units in ending inventory 1,000 Variable costs per unit: Direct materials $60 Direct labor 30 Variable manufacturing overhead 10 Variable selling and administrative 20 Total variable costs per unit $120 Fixed costs: Fixed manufacturing overhead $300,000 Fixed selling and administrative 450,000 $750,000 Total fixed costs Required: 1. Assume that the company uses Variable Costing. Compute the unit product cost for one computer desk. 2. Assume that the company uses Variable Costing. Prepare a contribution format income statement for the year. 3. What is the company's break-even point in terms of units sold?
Question: Shamrock Inc. makes an oak desk specially designed for personal computers. The desk sells for $200. Data for last year's operations follows: Units in beginning inventory 0 Units produced 10,000 Units sold 9,000 Units in ending inventory 1,000 Variable costs per unit: Direct materials $60 Direct labor 30 Variable manufacturing overhead 10 Variable selling and administrative 20 Total variable costs per unit $120 Fixed costs: Fixed manufacturing overhead $300,000 Fixed selling and administrative 450,000 $750,000 Total fixed costs Required: 1. Assume that the company uses Variable Costing. Compute the unit product cost for one computer desk. 2. Assume that the company uses Variable Costing. Prepare a contribution format income statement for the year. 3. What is the company's break-even point in terms of units sold?
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
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Transcribed Image Text:Question:
Shamrock Inc. makes an oak desk specially designed for personal computers. The desk sells for $200. Data for last year's
operations follows:
Units in beginning inventory
0
Units produced
10,000
Units sold
9,000
Units in ending inventory
1,000
Variable costs per unit:
Direct materials
$60
Direct labor
30
Variable manufacturing overhead 10
Variable selling and administrative 20
Total variable costs per unit
$120
Fixed costs:
Fixed manufacturing overhead
$300,000
Fixed selling and administrative
450,000
$750,000
Total fixed costs
Required:
1. Assume that the company uses Variable Costing. Compute the unit product cost for one computer desk.
2. Assume that the company uses Variable Costing. Prepare a contribution format income statement for the year.
3. What is the company's break-even point in terms of units sold?
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