Big Island Coffee Co. produced and sold 120,000 units last year. Per unit revenue and costs were as follows:

Fixed manufacturing overhead and administrative salaries are fixed costs. The per unit amounts are based on last year's production.

 A) Calculate last year's operating income when the company produced and sold 120,000 units. 

B) Calculate this year's operating income if the company plans to produce and sell 200,000 units. 

C) Calculate this year's operating income if the company plans to produce and sell 60,000 units. 

Transcribed Image Text:

Revenue Cost of Goods Sold: Direct Materials Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Overhead Total Cost of Goods Sold Gross Margin Selling and Administrative Costs: Sales Commissions (10% of sales) Administrative Salaries Total Selling and Administrative Operating Income <Loss> $20.00 3.00 2.00 1.00 $3.50 6.00 $35.00 26.00 $9.00 9.50 $0.50 Revenue Cost of Goods Sold: Direct Materials Direct Labour Variable Manufacturing Overhead Fixed Manufacturing Overhead Total Cost of Goods Sold Gross Margin Selling and Administrative Costs: Sales Commissions (10% of sales) Administrative Salaries Total Selling and Administrative Operating Income <Loss> $20.00 3.00 2.00 1.00 $3.50 6.00 $35.00 26.00 $9.00 9.50 $0.50

Answer rating: 100% (QA)

A for units 120000 Total operating income for units 12000... View the full answer