The 20X6 data that follow pertain to Rays, a manufacturer of swimming goggles. Rays had no beginning inventories in January 20X6. Selling price per unit $35.00 Variable manufacturing expense per unit $15.00 Sales commission expense per unit $5.00 Fixed manufacturing overhead $2,000,000 Fixed operating expense $250,000 # of goggles produced 200,000 # of goggles sold 185,000 Required: a) Calculate the following for Rays i) The total cost per unit ii) The value of ending inventories using marginal costing iii) The value of ending inventories using total costing b) Prepare a variable costing (contribution margin) income statement for Rays for the year ended December 31, 20X6. c) Rays marketing vice president believes a new sales promotion that costs $150,000 would increase sales to 200,000 goggles. Should the company go ahead with the promotion? Give your reason.
The 20X6 data that follow pertain to Rays, a manufacturer of swimming goggles. Rays had no beginning inventories in January 20X6.
Selling price per unit $35.00
Variable manufacturing expense per unit $15.00
Sales commission expense per unit $5.00
Fixed manufacturing
Fixed operating expense $250,000
# of goggles produced 200,000
# of goggles sold 185,000
Required:
a) Calculate the following for Rays
i) The total cost per unit
ii) The value of ending inventories using marginal costing
iii) The value of ending inventories using total costing
b) Prepare a variable costing (contribution margin) income statement for Rays for the year ended December 31, 20X6.
c) Rays marketing vice president believes a new sales promotion that costs $150,000
would increase sales to 200,000 goggles. Should the company go ahead with the promotion? Give your reason.
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