Sales (@ $25 per unit)....Cost of goods sold (@ $18 per unit).Gross margin.....$1,000,000 $1,250,000720,000900,000280,000350,000Selling and administrative expenses"210,000Net operating income ..230,000S 70,000 $ 120,000"S2 per unit variable; $130,000 fixed each year.page 294The company's $18 unit product cost is computed as follows:Direct materials$ 4Direct labor..7Variable manufacturing overhead.1Fixed manufacturing overhead ($270,000 + 45,000 units).6.Absorption costing unit product cost....$18Forty percent of fixed manufacturing overhead consists of wages and salaries; the remainder consists of depreciation charges on production equipment andbuildings.Production and cost data for the first two years of operations are:Year 1Year 2Units produced.45,000 45,000Units sold...40,000 50,000Required:1. Using variable costing, what is the unit product cost for both years?2. What is the variable costing net operating income in Year 1 and in Year 2?3. Reconcile the absorption costing and the variable costing net operating income figures for each vear.

Variable costing: Variable costing is the costing method in which only variable expenses are…

Answered: Sales (@ $25 per unit).... Cost of…

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

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Problem 1Q

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Required Information of 15 The following information applies to the questions displayed below] Westerville Company reported the following results from last year's operations: $2,300,000 Sales Variable expenses Contribution margin Fixed expenses 1,630, 000 24 460,000 $41,437,500 Net operating income erInt Average operating assets At the beginning of this year, the company has a $287,500 investment opportunity with the following cost and revenue characteristics: Sales Contribution margin ratio Fixed expenses $ 460,000 se% of sales $ 161,000 The company's minimum required rate of return is 15%. Required: 1 What is last year's margin? Prev 15 of 15 Nex てし Type here to search ye. 近 (6) F4 F5 F7 F8
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A firm operated at 80% of capacity for the past year, during which fixed costs were $190,000, variable costs were 65% of sales, and sales were $976,000. Operating profit was a. $151,600 Ob. $634,400 OC. $121,280 d. $341,600 ?
From the following information, compute percent change in operating income for the current year. Sales for the previous year $210,000 Contribution margin 181,000 Fixed costs 125,000 Operating income 36,000 Assume that sales for the current year increased by 17%. a.86% b.92% c.74% d.96%
90 Marston Corporation Statement of Income for the Year Ending December 31, 2022 Using Sales Agents Using Own Sales Force $26,000,000 Sales Cost of goods sold Variable Fixed Gross margin Marketing costs Commissions Fixed costs Operating income $11,700,000 2,870,000 4,680,000 3,420,000 $26,000,000 14,570,000 11,430,000 8,100,000 $ 3,330,000 $11,700,000 2,870,000 2,600,000 5,500,000 14,570,000 11,430,000 8,100,000 $ 3,330,000 Marston is considering hiring its own sales staff to replace the network of agents. Marston will pay its salespeople a commission of 10% and incur additional fixed costs of $2,080,000. 4 Required 1. Calculate Marston Corporation's 2022 contribution margin percentage, breakeven revenues, and degree of operating leverage under each of the two scenarios. (You will first have to recast the 2022 statement of income assuming Marston had hired its own sales staff.) 2. Describe the advantages and disadvantages of each type of sales alternative. 3. In 2023, Marston uses its…
If a business had sales of $4,369,000 and a margin of safety of 20%, the break-even point was a.$3,495,200 b.$873,800 c.$7,864,200 d.$5,242,800
Break-even sales under present and proposed conditionsHoward Industries Inc., operating at full capacity, sold 64,000 units at a price of $45 per unit during the current year. Its income statement is as follows: Sales.............................. $2,880,000 Cost of goods sold................. 1,400,000 Gross profit...................... $1,480,000 Expenses: Selling expenses................. $400,000 Administrative expenses......... 387,500 Total expenses................. 787,500 Income from operations............ $ 692,500 The division of costs between variable and fixed is as follows: Variable Fixed Cost of goods sold 75% 25% Selling expenses 60% 40% Administrative expenses 8 80% 20* Management is considering a plant expansion program for the following year that will permit an increase of $900,000 in yearly sales. The expansion will increase fixed costs by $212,500 but will not affect the relationship between sales and variable…
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