Alex Inc. is a merchandising company. Next month, the company expects to sell 100 units. The following
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Question:
Selling price per unit ... $50
Sales commission ............. 7%
Purchase price (cost) per unit $16
Advertising expense .......... $5,000 per month
Administrative expense ... $3,500 per month plus 12% of sales
Transportation out (freight) $3 per unit
Marketing expenses $2,500 per month
Assume that all activity mentioned in this problem is within the relevant range of 500 to 700 units.
1. The expected contribution margin next month is:
2. The expected gross margin (profit) is:
3. The expected net income next month is: (use the contribution approach to calculate net income):
Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
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