Question

Dover High Fashions Company manufactured and sold 1,000 leather handbags during July. Selected data for this month follow:
Sales .............. $130,000
Direct materials used ......... 35,000
Direct labor ............ 11,000
Variable manufacturing overhead .... 18,000
Fixed manufacturing overhead ..... 13,000
Variable selling and administrative expenses . ?
Fixed selling and administrative expenses ... ?
Contribution margin .......... 55,000
Operating income ......... 33,000
There were no beginning or ending inventories.
1. What were the variable selling and administrative expenses for July?
2. What were the fixed selling and administrative expenses for July?
3. What was the cost of goods sold during July?
4. Without prejudice to your earlier answers, assume that the fixed selling and administrative expenses for July amounted to $6,250.
a. What was the break-even point in units for July?
b. How many units must be sold to earn a target operating income of $17,600?
c. What would the selling price per unit have to be if the company wanted to earn an operating income of $62,650 on the sale of 910 units?



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  • CreatedNovember 19, 2014
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