A company reports the following per unit cost information for this year: Direct materials, $2.20; Direct...
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A company reports the following per unit cost information for this year: Direct materials, $2.20; Direct labor, $3.60, Variable overhead costs, $0.80; Variable selling and administrative costs, $1.20. Fixed costs are $30,000 per year. The company sold 7,000 units for $20 per unit. For next year, the company will use a new material, which will reduce direct materials cost to $1.90 per unit. The company will also increase its selling price to $21 per unit, which will decrease unit sales volume to 6,500 units. Fixed costs per year, direct labor cost per unit, variable overhead costs per unit, and variable selling and administrative expenses per unit will not change. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the contribution margin per unit when using the new material, increasing the selling price, and decreasing unit sales. Note: Round "per unit answers to 2 decimal places. Contribution margin per unit Sales price per unit Variable costs per unit Direct materials Direct labor Variable overhead Variable selling and administrative expenses Variable costs per unit Contribution margin per unit With new material and 000 Required 2 > 5 A company reports the following per unit cost information for this year: Direct materials, $2.20; Direct labor, $3.60; Variable overhead costs, $0.80; Variable selling and administrative costs, $1.20. Fixed costs are $30,000 per year. The company sold 7,000 units for $20 per unit. Skipped For next year, the company will use a new material, which will reduce direct materials cost to $1.90 per unit. The company will also increase its selling price to $21 per unit, which will decrease unit sales volume to 6,500 units. Fixed costs per year, direct labor cost per unit, variable overhead costs per unit, and variable selling and administrative expenses per unit will not change. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a contribution margin income statement when using the new material, increasing the selling price, and decreasing unit sales. Contribution Margin Income Statement With new material and increase selling price Number of units: $ 6,500 < Required 1 0 Required 2 > A company reports the following per unit cost information for this year: Direct materials, $2.20; Direct labor, $3.60, Variable overhead costs, $0.80; Variable selling and administrative costs, $1.20. Fixed costs are $30,000 per year. The company sold 7,000 units for $20 per unit. For next year, the company will use a new material, which will reduce direct materials cost to $1.90 per unit. The company will also increase its selling price to $21 per unit, which will decrease unit sales volume to 6,500 units. Fixed costs per year, direct labor cost per unit, variable overhead costs per unit, and variable selling and administrative expenses per unit will not change. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Compute the contribution margin per unit when using the new material, increasing the selling price, and decreasing unit sales. Note: Round "per unit answers to 2 decimal places. Contribution margin per unit Sales price per unit Variable costs per unit Direct materials Direct labor Variable overhead Variable selling and administrative expenses Variable costs per unit Contribution margin per unit With new material and 000 Required 2 > 5 A company reports the following per unit cost information for this year: Direct materials, $2.20; Direct labor, $3.60; Variable overhead costs, $0.80; Variable selling and administrative costs, $1.20. Fixed costs are $30,000 per year. The company sold 7,000 units for $20 per unit. Skipped For next year, the company will use a new material, which will reduce direct materials cost to $1.90 per unit. The company will also increase its selling price to $21 per unit, which will decrease unit sales volume to 6,500 units. Fixed costs per year, direct labor cost per unit, variable overhead costs per unit, and variable selling and administrative expenses per unit will not change. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Prepare a contribution margin income statement when using the new material, increasing the selling price, and decreasing unit sales. Contribution Margin Income Statement With new material and increase selling price Number of units: $ 6,500 < Required 1 0 Required 2 >
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Contribution Margin The contribution margin is the sales revenue over the total variable cost incurr... View the full answer
Related Book For
Horngrens Financial and Managerial Accounting
ISBN: 978-0133866292
5th edition
Authors: Tracie L. Nobles, Brenda L. Mattison, Ella Mae Matsumura
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