Cigco Co. sells two products, the deluxe model and the standard. The deluxe sells for $40/unit....

Transcribed Image Text:

Cigco Co. sells two products, the deluxe model and the standard. The deluxe sells for $40/unit. The standard sells for $20/unit. Sales are projected to be 1,000 units for the deluxe and 3,000 units for the standard. The deluxe model uses 6 oz. of direct material, the standard model uses 4 oz. of direct material. The material costs $.50/oz. The deluxe model takes 1/2 hour of labor to produce, the standard model takes 1/6 hour of labor to produce. The wage rate is $12.00/hour. Total overhead is $32,000, of which $24,000 is fixed. Total selling and administration costs are $30,000, of which $14,000 is fixed. Prepare a Traditional Income Statement and a Contribution Margin Income Statement. Cigco Co. sells two products, the deluxe model and the standard. The deluxe sells for $40/unit. The standard sells for $20/unit. Sales are projected to be 1,000 units for the deluxe and 3,000 units for the standard. The deluxe model uses 6 oz. of direct material, the standard model uses 4 oz. of direct material. The material costs $.50/oz. The deluxe model takes 1/2 hour of labor to produce, the standard model takes 1/6 hour of labor to produce. The wage rate is $12.00/hour. Total overhead is $32,000, of which $24,000 is fixed. Total selling and administration costs are $30,000, of which $14,000 is fixed. Prepare a Traditional Income Statement and a Contribution Margin Income Statement.

Answer rating: 100% (QA)

Traditional Income Statement Sales Deluxe 1000 units 40unit 40000 Standard 3000 units 20unit 60000 T... View the full answer