Variable Cost and Full Costing Income: Comprehensive problem; Break-even Calculation. the following information relates to Axar Products for calendar year 2020, the company's first year of operation. Units produced 20,000 Units sold 18,000 Selling price per unit $30 Direct material per unit $6 Direct labor per unit $4 Variable manufacturing overhead per unit $2 Variable selling cost per unit $3 Annual fixed manufacturing overhead $160,000 Annual fixed selling and administration expense $80,000 Required: a. Prepare an income statement using full costing b. Prepare an incomve statement using variable costing c. Using the variable costing income statement, calculate the company's break-even point in sales dollars and in units. Can the break-even point be calculated easily using the full costing income statement? Why or why not?
Variable Cost and Full Costing Income: Comprehensive problem; Break-even Calculation. the following information relates to Axar Products for calendar year 2020, the company's first year of operation. Units produced 20,000 Units sold 18,000 Selling price per unit $30 Direct material per unit $6 Direct labor per unit $4 Variable manufacturing overhead per unit $2 Variable selling cost per unit $3 Annual fixed manufacturing overhead $160,000 Annual fixed selling and administration expense $80,000 Required: a. Prepare an income statement using full costing b. Prepare an incomve statement using variable costing c. Using the variable costing income statement, calculate the company's break-even point in sales dollars and in units. Can the break-even point be calculated easily using the full costing income statement? Why or why not?
Managerial Accounting: The Cornerstone of Business Decision-Making
7th Edition
ISBN:9781337115773
Author:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Publisher:Maryanne M. Mowen, Don R. Hansen, Dan L. Heitger
Chapter7: Cost-volume-profit Analysis
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Problem 26BEB: Variable Cost Ratio, Contribution Margin Ratio Chillmax Company plans to sell 3,500 pairs of shoes...
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![Variable Cost and Full Costing Income: Comprehensive problem; Break-even Calculation. the following information relates
to Axar Products for calendar year 2020, the company's first year of operation.
Units produced 20,000
Units sold 18,000
Selling price per unit $30
Direct material per unit $6
Direct labor per unit $4
Variable manufacturing overhead per unit $2
Variable selling cost per unit $3
Annual fixed manufacturing overhead $160,000
Annual fixed selling and administration expense $80,000
Required:
a. Prepare an income statement using full costing
b. Prepare an incomve statement using variable costing
c. Using the variable costing income statement, calculate the company's break-even point in sales dollars and in units. Can
the break-even point be calculated easily using the full costing income statement? Why or why not?](/v2/_next/image?url=https%3A%2F%2Fcontent.bartleby.com%2Fqna-images%2Fquestion%2F55e9f9ec-8bb6-44dc-b87e-f3c5eede0098%2F7eea5f07-6866-4ffc-8aff-22222ab574f5%2Fqxvx4wc_processed.jpeg&w=3840&q=75)
Transcribed Image Text:Variable Cost and Full Costing Income: Comprehensive problem; Break-even Calculation. the following information relates
to Axar Products for calendar year 2020, the company's first year of operation.
Units produced 20,000
Units sold 18,000
Selling price per unit $30
Direct material per unit $6
Direct labor per unit $4
Variable manufacturing overhead per unit $2
Variable selling cost per unit $3
Annual fixed manufacturing overhead $160,000
Annual fixed selling and administration expense $80,000
Required:
a. Prepare an income statement using full costing
b. Prepare an incomve statement using variable costing
c. Using the variable costing income statement, calculate the company's break-even point in sales dollars and in units. Can
the break-even point be calculated easily using the full costing income statement? Why or why not?
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