FG & Co. manufactures and sells floor tiles. The unit of measurement in the tiles industry is a batch of 1,000 tiles. The firm provides the following information for the year under consideration: Direct materials cost $ 80 per batch Direct labour cost $ 150 per batch Fixed manufacturing overheads $ 1,600,000 Fixed marketing overheads $ 700,000 Variable marketing overheads $ 40 per batch Number of batches produced 16,000 batches Number of units sold 14,000 batches The firm allocates fixed manufacturing overheads equally to the number of batches produced during the period. 

Required:

 (i) Prepare contribution margin statement for year for which the firm provided the information.

 (ii)Prepare gross margin statement for the year for which the firm provided the information.

 (iii) Reconcile the operating income presented in the contribution margin statement and that in the gross margin statement.

Answer rating: 100% (QA)

i Contribution margin statement Sales revenue 14000 batches sold x 300 per batch 4200000 Variable co... View the full answer