Suppose that Larimer Company sells a product for $20. Unit costs are as follows: Direct materials $1.70 Direct labor 1.60 Variable factory overhead 2.00 Variable selling and administrative expense 1.50 Total fixed factory overhead is $55,240 per year, and total fixed selling and administrative expense is $38,480. Required: 1. Calculate the variable cost per unit and the contribution margin per unit. 2. Calculate the contribution margin ratio and the variable cost ratio. 3. Calculate the break-even units. 4. Prepare a contribution margin income statement at the break-even number of units. Enter all amounts as positive numbers.
Suppose that Larimer Company sells a product for $20. Unit costs are as follows: Direct materials $1.70 Direct labor 1.60 Variable factory overhead 2.00 Variable selling and administrative expense 1.50 Total fixed factory overhead is $55,240 per year, and total fixed selling and administrative expense is $38,480. Required: 1. Calculate the variable cost per unit and the contribution margin per unit. 2. Calculate the contribution margin ratio and the variable cost ratio. 3. Calculate the break-even units. 4. Prepare a contribution margin income statement at the break-even number of units. Enter all amounts as positive numbers.
Principles of Cost Accounting
17th Edition
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Edward J. Vanderbeck, Maria R. Mitchell
Chapter10: Cost Analysis For Management Decision Making
Section: Chapter Questions
Problem 9P: Grand Canyon Manufacturing Inc. produces and sells a product with a price of 100 per unit. The...
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Suppose that Larimer Company sells a product for $20. Unit costs are as follows:
Direct materials | $1.70 |
Direct labor | 1.60 |
Variable factory |
2.00 |
Variable selling and administrative expense | 1.50 |
Total fixed factory overhead is $55,240 per year, and total fixed selling and administrative expense is $38,480.
Required: | |
1. | Calculate the variable cost per unit and the contribution margin per unit. |
2. | Calculate the contribution margin ratio and the variable cost ratio. |
3. | Calculate the break-even units. |
4. | Prepare a contribution margin income statement at the break-even number of units. Enter all amounts as positive numbers. |
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