Stuart Manufacturing produces metal picture frames. The company's income statements for the last two years are...
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Stuart Manufacturing produces metal picture frames. The company's income statements for the last two years are presented below: Last year This year 50,000 70,000 $800,000 $1,120,000 Less: Cost of goods sold 550,000 710,000 Gross margin 250,000 410,000 Less: Operating expenses 150,000 190,000 Net income $100,000 $220,000 Units sold Sales The company has no beginning or ending inventories. All activity in this problem is in the relevant range. Required: a. Estimate the company's total variable cost per unit, and its total fixed costs per year. (Remember that this is a manufacturing firm.) b. Compute the company's contribution margin for this year. Stuart Manufacturing produces metal picture frames. The company's income statements for the last two years are presented below: Last year This year 50,000 70,000 $800,000 $1,120,000 Less: Cost of goods sold 550,000 710,000 Gross margin 250,000 410,000 Less: Operating expenses 150,000 190,000 Net income $100,000 $220,000 Units sold Sales The company has no beginning or ending inventories. All activity in this problem is in the relevant range. Required: a. Estimate the company's total variable cost per unit, and its total fixed costs per year. (Remember that this is a manufacturing firm.) b. Compute the company's contribution margin for this year.
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