Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the...
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Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labour workers. Thus, variable expenses are high, totaling $15 per ball, of which 60% is direct labour cost. Last year, the company sold 30,000 of these balls, with the following results: Sales (30,000 balls) Variable expenses Contribution margin Fixed expenses Net erating income $ $ 750,000 450,000 300,000 210,000 90,000 b-1. Assume the new plant is built and that next year the company manufactures and sells 30,000 balls (the same number as sold last year). Prepare a contribution format income statement. Northwood Company Contribution Income Statement Sales $ 0 0 Northwood Company manufactures basketballs. The company has a ball that sells for $25. At present, the ball is manufactured in a small plant that relies heavily on direct labour workers. Thus, variable expenses are high, totaling $15 per ball, of which 60% is direct labour cost. Last year, the company sold 30,000 of these balls, with the following results: Sales (30,000 balls) Variable expenses Contribution margin Fixed expenses Net erating income $ $ 750,000 450,000 300,000 210,000 90,000 b-1. Assume the new plant is built and that next year the company manufactures and sells 30,000 balls (the same number as sold last year). Prepare a contribution format income statement. Northwood Company Contribution Income Statement Sales $ 0 0
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Related Book For
Managerial Accounting
ISBN: 978-0697789938
13th Edition
Authors: Ray H. Garrison, Eric W. Noreen, Peter C. Brewer
Posted Date:
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