Sjostrom Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range. Sales (7,000 units) $ 280,000 Variable expenses 182,000 Contribution margin 98,000 Fixed expenses 84,000 Net operating income $ 14,000 If the variable cost per unit increases by $10, spending on advertising increases by $1,500, and unit sales increase by 15,800 units, the net operating income would be closest to: a/ 12,500 b/ 114,100 c/ 91,200 d/ 5,700
Process Costing
Process costing is a sort of operation costing which is employed to determine the value of a product at each process or stage of producing process, applicable where goods produced from a series of continuous operations or procedure.
Job Costing
Job costing is adhesive costs of each and every job involved in the production processes. It is an accounting measure. It is a method which determines the cost of specific jobs, which are performed according to the consumer’s specifications. Job costing is possible only in businesses where the production is done as per the customer’s requirement. For example, some customers order to manufacture furniture as per their needs.
ABC Costing
Cost Accounting is a form of managerial accounting that helps the company in assessing the total variable cost so as to compute the cost of production. Cost accounting is generally used by the management so as to ensure better decision-making. In comparison to financial accounting, cost accounting has to follow a set standard ad can be used flexibly by the management as per their needs. The types of Cost Accounting include – Lean Accounting, Standard Costing, Marginal Costing and Activity Based Costing.
Sjostrom Corporation has provided the following contribution format income statement. Assume that the following information is within the relevant range.
| Sales (7,000 units) | $ 280,000 |
|---|---|
| Variable expenses | 182,000 |
| Contribution margin | 98,000 |
| Fixed expenses | 84,000 |
| Net operating income | $ 14,000 |
If the variable cost per unit increases by $10, spending on advertising increases by $1,500, and unit sales increase by 15,800 units, the net operating income would be closest to:
a/ 12,500
b/ 114,100
c/ 91,200
d/ 5,700
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
