Financial & Managerial Accounting
Financial & Managerial Accounting
17th Edition
ISBN: 9780078025778
Author: Jan Williams, Susan Haka, Mark S Bettner, Joseph V Carcello
Publisher: McGraw-Hill Education
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Chapter 20, Problem 9E

a.

To determine

Calculate the contribution margin per unit.

b.

To determine

Calculate the margin of safety if monthly sales total 45,000 units.

c.

To determine

Calculate the company’s monthly operating loss if it sells only 38,000 units.

d.

To determine

Compute the total cost per unit for the followings and explain the reason for the changes in unit costs.

  1. (1) 40,000 pens per month.
  2. (2) 50,000 pens per month.

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Vistar Manufacturing bases its manufacturing overhead budget on budgeted direct labor-hours. The direct labor budget indicates that 8,200 direct labor-hours will be required in July. The variable overhead rate is $4.85 per direct labor-hour. The company's budgeted fixed manufacturing overhead is $125,000 per month, which includes depreciation of $10,500. All other fixed manufacturing overhead costs represent current cash flows. What should be the July cash disbursements for manufacturing overhead on the manufacturing overhead budget?
Please explain the correct approach for solving this general accounting question.
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Chapter 20 Solutions

Financial & Managerial Accounting

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