analysis of Sutcliffe Industries's fixed costs revealed that the company actually faces annual fixed overhead costs...
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analysis of Sutcliffe Industries's fixed costs revealed that the company actually faces annual fixed overhead costs of $4,200 and annual fixed selling and administrative costs of $1,800. Variable cost estimates are correct: direct materials cost, $12.00 per unit; direct labor costs, $15.00 per unit; and variable overhead costs, $3.00 per unit. At this time, the selling price of $40 will not change. Complete the following formulas for the revised fixed costs. Enter the ratio as a percentage. Contribution Margin per Unit Contribution Margin Ratio = Break-Even Point in Sales Dollars Now complete the formulas for (1) the break-even point in sales dollars and (2) the units sold at the break-even point. To calculate this, divide the break-even point in sales dollars by the unit selling price. $ % % S units = Units Sold at Break-Even Point Assume that the number of units that Sutcliffe sold exceeded the break-even point by one (1). How much would operating income be? What would operating income be if the units sold exceeded the break-even point by five (5) units? analysis of Sutcliffe Industries's fixed costs revealed that the company actually faces annual fixed overhead costs of $4,200 and annual fixed selling and administrative costs of $1,800. Variable cost estimates are correct: direct materials cost, $12.00 per unit; direct labor costs, $15.00 per unit; and variable overhead costs, $3.00 per unit. At this time, the selling price of $40 will not change. Complete the following formulas for the revised fixed costs. Enter the ratio as a percentage. Contribution Margin per Unit Contribution Margin Ratio = Break-Even Point in Sales Dollars Now complete the formulas for (1) the break-even point in sales dollars and (2) the units sold at the break-even point. To calculate this, divide the break-even point in sales dollars by the unit selling price. $ % % S units = Units Sold at Break-Even Point Assume that the number of units that Sutcliffe sold exceeded the break-even point by one (1). How much would operating income be? What would operating income be if the units sold exceeded the break-even point by five (5) units?
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Solution To calculate the revised fixed costs we need to add the annual fixed overhead costs and the annual fixed selling and administrative costs Rev... View the full answer
Related Book For
Managerial Accounting
ISBN: 9780073526706
12th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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