Question

Suppose that Adams Company sells a product for $20. Unit costs are as follows:
Direct materials ................. $3.90
Direct labor .................. 1.40
Variable factory overhead ............ 2.10
Variable selling and administrative expense ...... 1.60
Total fixed factory overhead is $52,000 per year, and total fixed selling and administrative expense is $38,530.

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.


$1.99
Sales2
Views76
Comments0
  • CreatedSeptember 22, 2015
  • Files Included
Post your question
5000