The section of Waterways that produces controllers for the company provided the following information.Sales for month of February:Unit variable manufacturing cost:Unit selling price:3,800$10.00$43.00Fixed manufacturing overhead cost (per month for controllers):$83,000Unit variable selling and administrative costs:$2.90Fixed selling and administrative expenses (per month for controllers): $13,950Using this information for the controllers, determine the contribution margin ratio, the degree of operating leverage, the break-even point in sales dollars, and the margin of safety ratio for WaterwaysCorporation on this product.Contribution Margin Ratio (Round to O decimal places, e.g. 25%.)70%Degree of Operating Leverage (Round to 2 decimal places, e.g. 5.25.)Break-even Point in DollarsMargin of Safety Ratio (Round to 1 decimal place, ex. 5.2%)6.56138500%SUPPORT8:34 PM3/16/2024

The contribution margin is calculated as the difference between the sales and variable costs. The…

Answered: Sales for month of February: 3,800 Unit…

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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Prepare an absorption-costing income statement for last year. Round to nearest whole number.
The manufacturing costs of Ackerman Industries for the first three months of the year follow: Total Costs Units Produced January $264,960 1,380 units February 392,730 2,330 March 412,160 3,680 Using the high-low method, determine (a) the variable cost per unit and (b) the total fixed cost. Round all answers to the nearest whole dollar. a. Variable cost per unit $fill in the blank 1 b. Total fixed cost $fill in the blank 2
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Estimated Income Statements, using Absorptionand Variable Costing Prior to the first month of operations ending October 31, Marshall Inc. estimated the following operating results: Sales (24,800 x $86) $2,132,800 Manufacturing costs (24,800 units): Direct materials 1,282,160 Direct labor 302,560 Variable factory overhead 141,360 Fixed factory overhead 168,640 Fixed selling and administrative expenses 45,900 Variable selling and administrative expenses 55,500 The company is evaluating a proposal to manufacture 27,200 units instead of 24,800 units, thus creating an ending inventory of 2,400 units. Manufacturing the additional units will not change sales, unit variable factory overhead costs, total fixed factory overhead cost, or total selling and administrative expenses. a. 1. Prepare an estimated income statement, comparing operating results if 24,800 and 27,200 units are manufactured in the absorption costing format. If an amount box does not…
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Farrow Company reports the following annual results. Contribution Margin Income Statement Per Unit Annual Total Sales (240,000 units) $ 15.00 $ 3,600,000 Variable costs Direct materials 2.00 480,000 Direct labor 4.00 960,000 Overhead 2.50 600,000 Contribution margin 6.50 1,560,000 Fixed costs Fixed overhead 2.00 480,000 Fixed general and administrative 1.50 360,000 Income $ 3.00 $ 720,000 The company receives a special offer for 24,000 units at $12 per unit. The additional sales would not affect its normal sales. Variable costs per unit would be the same for the special offer as they are for the normal units. The special offer would require incremental fixed overhead of $96,000 and incremental fixed general and administrative costs of $103,000. (a) Compute the income or loss for the special offer.(b) Should the company accept or reject the special offer? Compute the income or loss for the special offer. (Round your "Per Unit" answers to 2…
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