Preparing a Profit Equation to Predict Future Profits Picnic Time produces a picnic basket that is sold
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Preparing a Profit Equation to Predict Future Profits
Picnic Time produces a picnic basket that is sold for $ per unit.
Assume the company produced and sold baskets during July. There were no beginning or ending inventories. Variable and fixed costs follow. Variable Cost per Unit
Manufacturing: Direct materials $
Direct labor
Manufacturing overhead
Selling and administrative
Total $
Fixed Costs per Month
Manufacturing overhead $
Selling and administrative
Total $ aPrepare a monthly profit equation.
Profits $Answer X $Answer $Answer X
where X number of picnic baskets.
bDetermine profit for the month of July using the equation from
cFor August, the company estimates that sales will range between on the lowend and on the highend.
What is the range of predicted profits?
Related Book For
Introduction to Managerial Accounting
ISBN: 978-0078025792
7th edition
Authors: Peter Brewer, Ray Garrison, Eric Noreen
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