Shock Company manufactures electronic equipment. The following is a summary of its basic cost and revenue data:     Per Unit Percent Sales price $ 450 100.00 Variable costs 232 51.56 Unit contribution margin $ 218 48.44   Assume that Shock Company is currently selling 580 products per month and monthly fixed costs are $79,600.

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Chapter3: Cost Behavior And Cost Forecasting
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Problem 54E: Income Statements under Absorption and Variable Costing In the coming year, Kalling Company expects...
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Shock Company manufactures electronic equipment. The following is a summary of its basic cost and revenue data:

 

  Per Unit Percent
Sales price $ 450 100.00
Variable costs 232 51.56
Unit contribution margin $ 218 48.44

 

Assume that Shock Company is currently selling 580 products per month and monthly fixed costs are $79,600.



Shock Company's operating income (πB) is calculated to be:

 

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