A manufacturer's contribution margin income statement for the year follows. Prepare contribution margin income statements for each of the three separate cases below. Contribution Margin Income Statement Sales (12,500 units x $12 per unit) Variable costs (12,500 units x $7 per unit) Contribution margin (12,500 units x $5 per unit Fixed costs Income 1. The 12,500 units produced and sold increases to 13,000 units and fixed costs increase by $5,800. 2. Unit selling price decreases by 4% and units produced and sold increase by 8%. Hint: A unit increase has both a sales and costs impact. 3. Fixed costs increase by $20,800, variable costs per unit decrease by $2, and units produced and sold increase by 400. $ 150,000 87,500 62,500 49,000 $ 13,500 1. The 12,500 units produced and sold increases to 13,000 units and fixed costs increase by $5,800. Contribution Margin Income Statement Sales Variable costs Contribution margin Fixed costs Income (loss) Sales Variable costs Contribution margin Fixed costs $ $ 2. Unit selling price decreases by 4% and units produced and sold increase by 8%. Contribution Margin Income Statement $ 156,000 91,000 65,000 54,800 10,200 135,000 135,000

A manufacturer's contribution margin income statement for the year follows. Prepare contribution margin income statements for each of the three separate cases below. Contribution Margin Income Statement Sales (12,500 units x $12 per unit) Variable costs (12,500 units x $7 per unit) Contribution margin (12,500 units x $5 per unit Fixed costs Income 1. The 12,500 units produced and sold increases to 13,000 units and fixed costs increase by $5,800. 2. Unit selling price decreases by 4% and units produced and sold increase by 8%. Hint: A unit increase has both a sales and costs impact. 3. Fixed costs increase by $20,800, variable costs per unit decrease by $2, and units produced and sold increase by 400. $ 150,000 87,500 62,500 49,000 $ 13,500 1. The 12,500 units produced and sold increases to 13,000 units and fixed costs increase by $5,800. Contribution Margin Income Statement Sales Variable costs Contribution margin Fixed costs Income (loss) Sales Variable costs Contribution margin Fixed costs $ $ 2. Unit selling price decreases by 4% and units produced and sold increase by 8%. Contribution Margin Income Statement $ 156,000 91,000 65,000 54,800 10,200 135,000 135,000

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

Chapter3: Cost Behavior And Cost Forecasting

Section: Chapter Questions

Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...

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West Island distributes a single product. The companys sales and expenses for the month of June are shown. Using the information presented, answer these questions: A. What is the break-even point in units sold and dollar sales? B. What is the total contribution margin at the break-even point? C. If West Island wants to earn a profit of $21,000, how many units would they have to sell? D. Prepare a contribution margin income statement that reflects sales necessary to achieve the target profit.
Cost Classification Loring Company incurred the following costs last year: Required: 1. Classify each of the costs using the following table format. Be sure to total the amounts in each column. Example: Direct materials, 216,000. 2. What was the total product cost for last year? 3. What was the total period cost for last year? 4. If 30,000 units were produced last year, what was the unit product cost?
Using the information in the previous exercises about Marleys Manufacturing, determine the operating income for department B, assuming department A sold department B 1,000 units during the month and department A reduces the selling price to the market price.
Hudson Company reports the following contribution margin income statement. Hudson Company reports the following contribution margin income statement.A manufacturer's contribution margin income statement for the yearfollows. Required: Prepare a contribution margin income statement if the number of units sold (a) increases by 200 units and (b) decreases by 200 units. HUDSON COMPANY Contribution Margin Income Statement For Year EndeDecember 31 Required: 1. Assume Hudson has a target income of $162,000. What amount of sales dollars is needed to produce this target income? 2. If Hudson achieves its target income, what is its margin of safety (in percent) ?Margin of safety
c) Assuming sales of 5,000 units, prepare a contribution margin income statement for the year ended December 31, 2020, detailing the components of total variable costs and total fixed costs, and clearly showing contribution and net income. d) Assuming sales of 5,000 units, calculate Buggs-Off break-even point and margin of safety in units and sales dollars.
A company reports the following contribution margin income statement for this year. For next year, if the unit sales price is reduced to $42 and advertising is increased by $10,800, sales will increase from 5,200 to 7,200 units. Contribution Margin Income Statement For Year Ended December 31 Sales (5,200 × $46) Variable costs (5,200 x $25) Contribution margin Fixed costs Income Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a contribution margin income statement for next year assuming the company lowers the sales price per unit to $42 and increases advertising costs by $10,800. Contribution Margin Income Statement For Year Ended December 31 $ 239,200 130,000 109, 200 46,800 $ 62,400 Sales Variable costs Contribution margin Fixed costs Income
Annual financial information for a company follows. Contribution Margin Income Statement Sales (8,220 units) Variable costs Direct materials Direct labor Variable overhead Contribution margin Fixed costs Fixed overhead Fixed general and administrative Income Required A Required B For the special offer, calculate the income or loss. Note: Round your "Per Unit" answers to 2 decimal places. SPECIAL OFFER ANALYSIS Contribution margin Per Unit $ 10.10 Income (loss) A new customer offers to buy 2,110 units at $4.10 per unit. This special offer would incur the same variable costs per unit as for the company's normal units, and the special offer would not affect normal sales. This special offer would incur incremental fixed general and administrative costs of $1,477 and incremental fixed overhead of $2,954. Complete this question by entering your answers in the tabs below. $ 1.00 1.30 1.80 6.00 Required A 1.60 1.00 $ 3.40 Annual Total $ 83,022 Per Unit 0.00 8,220 10,686 14,796 49,320 13,152…
A.Prepare Statement of Income and Expenses with a marginal contribution approach. Empresas La Torre presents the following information for the year ended December 31, 2020: Product Costs: Direct materials (Variables) $ 50.00 per unit Direct Labor (Variable) $ 20.00 per hour Variable Indirect Costs $ 10.00 per hour Total Fixed Indirect Costs $ 250,000 Period Expenses Seller Commissions $ 20.00 per unit Variable Administrative Expenses $ 30.00 per unit Total Fixed Administrative Expenses $ 150,000 The company sells solar batteries at $ 200.00 per unit. Making each battery takes 2 hours of direct labor. The company taxes its income at 40%. If the Company sells 10,000 units, prepare a statement of income and expenses using the marginal contribution approach.
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A company reports the following information for the current year: Units Produced (25,000)< Units Sold (15,000), DM ($9 per unit), DL ($11 per unit), VOH (total $75,000) and FOH (total $137,500). If the product is sold for $50 per unit and operating expenses are $200,000, compute the net income under absorption costing. O a. $80,500 O b. $122,500 c. $55,000 O d. $67,500
The accountant for PNW, LLC has prepared a contribution format income statement. Assume that the following information is within the relevant range. Sales (9,000 units) Variable expenses Contribution margin Fixed expenses $540,000 405,000 135,000 130,500 Net operating income $ 4,500 Assuming that the information provided is within the relevant range, the contribution margin ratio is closest to: