Units produced and sold: 10,000 Total Per Unit Revenue: $8,000,000 $800.00 Less: Costs Advertising (all fixed) 1,000,000
Question:
Units produced and sold: 10,000
| Total | Per Unit | ||
| Revenue: | $8,000,000 | $800.00 | |
| Less: Costs | |||
| Advertising (all fixed) | 1,000,000 | $100.00 | |
| Administrative office salaries | 720,000 | $72.00 | |
| Commission paid to sales representatives | 400,000 | $40.00 | |
| Depreciation on factory machines | 100,000 | $10.00 | |
| Factory supervisor salary | 130,000 | $13.00 | |
| Labor of factory machine operators | 800,000 | $80.00 | |
| Paint used to coat tables | 250,000 | $25.00 | |
| Property taxes on factory building | 500,000 | $50.00 | |
| Wood and metal used in tables | 1,500,000 | $150.00 | |
| Net operating income | 2,600,000 | $260.00 | |
1. Compute the net operating income when the number of units produced and sold is 8,000.
2. Assume Corp has a corporate income tax rate of 25%. Compute the number of ping pong tables that must be sold in order to generate an after-tax profit of $3,000,000.
The Dairy Dandy sells cups of ice cream and cups of frozen yogurt. It noted the following information about its business. Cup of ice cream: Selling price $5.50; contribution margin $3.00 Cup of frozen yogurt: Selling price $7.00; contribution margin $4.00 Monthly fixed costs: $11,450 Sales mix in units: 75% ice cream cups; 25% cups of frozen yogurt |
The owner expects selling prices, variable costs and fixed costs to remain stable over the next year.
3. Compute the overall weighted-average contribution margin per cup for the Dairy Dandy using its current sales mix.
Expert Answer:
Managerial Accounting
ISBN: 9781260247787
17th Edition
Authors: Ray Garrison, Eric Noreen, Peter Brewer
