Snow ridge Manufacturing has a factory that produces custom bathroom cabinets. Should the company consider the changes from Schedule-6? Why or why not? A comprehensive discussion is needed to fully answer this question. Please consider and discuss the following areas: fixed costs change, economies of scale, CM per unit change, and sales fluctuation. In addition, give some real examples of additional cost increases for fixed costs and decreases for direct materials that could be implemented for this specific business. (at least 3 examples in total). 

  

Transcribed Image Text:

SCHEDULE 5 SNOWRIDGE MANUFACTURING CVP INCOME STATEMENT Volumes By Unit 400 1,000 1,200 per unit Sales Revenue $4 1,582,000 $ 3,955,000 $ 4,746,000 $ 3,955 Less: Variable Costs Direct Materials 640,000 1,600,000 1,920,000 1,600 Direct Labor 120,000 300,000 360,000 300 Sales Commision 18,000 45,000 54,000 45 Office Utilities & Misc. Office Expenses 4,000 10,000 12,000 10 Sales Travel 9,600 24,000 28,800 24 Total Variable Costs 791,600 1,979,000 2,374,800 1,979 Total Contribution Margin 790,400 1,976,000 2,371,200 1,976 Less: Fixed Costs Total Fixed Cost 1,007,000 (216,600) $ 1,007,000 1,007,000 1,007 Operating Income 969,000 $ 1,364,200 %24 969 SCHEDULE 5A BREAK-EVEN UNITS & SALES Break-even Units 510 units Break-even Sales ($) 2$ 2,017,050 SCHEDULE 5 SNOWRIDGE MANUFACTURING CVP INCOME STATEMENT Volumes By Unit 400 1,000 1,200 per unit Sales Revenue $4 1,582,000 $ 3,955,000 $ 4,746,000 $ 3,955 Less: Variable Costs Direct Materials 640,000 1,600,000 1,920,000 1,600 Direct Labor 120,000 300,000 360,000 300 Sales Commision 18,000 45,000 54,000 45 Office Utilities & Misc. Office Expenses 4,000 10,000 12,000 10 Sales Travel 9,600 24,000 28,800 24 Total Variable Costs 791,600 1,979,000 2,374,800 1,979 Total Contribution Margin 790,400 1,976,000 2,371,200 1,976 Less: Fixed Costs Total Fixed Cost 1,007,000 (216,600) $ 1,007,000 1,007,000 1,007 Operating Income 969,000 $ 1,364,200 %24 969 SCHEDULE 5A BREAK-EVEN UNITS & SALES Break-even Units 510 units Break-even Sales ($) 2$ 2,017,050

Answer rating: 100% (QA)

olution Parte culars Cost per Total Cost for 1000 unik Unit ... View the full answer