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Financial & Managerial Accounting

13th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285866307
BuyFind

Financial & Managerial Accounting

13th Edition
Carl Warren + 2 others
Publisher: Cengage Learning
ISBN: 9781285866307

Solutions

Chapter
Section
Chapter 19, Problem 19.26EX
Textbook Problem

Items on variable costing income statement

In the following equations, based on the variable costing income statement, identify the items designated by X:

  1. a. Sales – X = Manufacturing Margin
  2. b. Manufacturing Margin – X = Contribution Margin
  3. c. Contribution Margin – X = Income from Operations

Expert Solution
To determine

Variable costing income statement:

A variable costing income statement is a statement where all variable expenses are deducted from revenue to ascertain a separate contribution margin, from which all fixed expenses are then subtracted to arrive at the net profit or loss for the period.

To identify: the items designated by X in the following equation, based on variable costing income statement.

Explanation of Solution

Identify the items designated by X in the following equations.

a) Sales - X = Manufacturing Margin

 Variable cost of goods sold

Manufacturing margin is calculated by deducting the variable cost of goods sold from sales.

Manufacturing margin = Sales  Variable cost of goods sold

b) Manufacturing Margin - X = Contribution Margin

Variable selling and administrative expenses

Contribution margin is the excess of manufacturing margin over variable selling and administrative expenses

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Chapter 19 Solutions

Financial & Managerial Accounting
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Ch. 19 - High-low method The manufacturing costs of...Ch. 19 - High-low method The manufacturing costs of...Ch. 19 - Contribution margin Michigan Company sells 10,000...Ch. 19 - Contribution margin Weidner Company sells 22,000...Ch. 19 - Break-even point Santana sells a product for 115...Ch. 19 - Break-even point Elrod Inc. sells a product for 75...Ch. 19 - Target profit Versa Inc. sells a product for 100...Ch. 19 - Target profit Scrushy Company sells a product for...Ch. 19 - Sales mix and break-even analysis Wide Open...Ch. 19 - Sales mix and break-even an analysis Einhorn...Ch. 19 - Operating leverage SungSam Enterprises reports the...Ch. 19 - Operating leverage Westminster Co. reports the...Ch. 19 - Margin of safety Melton Inc. has sales of...Ch. 19 - Margin of safety Junck Company has sales of...Ch. 19 - Classify costs Following is a list of various...Ch. 19 - Identify cost graphs The following cost graphs...Ch. 19 - Identify activity bases For a major university,...Ch. 19 - Identify activity bases From the following list of...Ch. 19 - Identify fixed and variable costs Intuit Inc....Ch. 19 - Relevant range and fixed and variable costs...Ch. 19 - High-low method Diamond Inc. has decided to use...Ch. 19 - High-low method for a service company Boston...Ch. 19 - Contribution margin ratio a. Segar Company budgets...Ch. 19 - Contribution margin and contribution margin ratio...Ch. 19 - Break even sales and sales to realize income from...Ch. 19 - Break even sales Anheuser-Busch InBev Companies,...Ch. 19 - Break-even sales Currently, the unit selling price...Ch. 19 - Break-even analysis The Junior League of...Ch. 19 - Break-even analysis Media outlets such as ESPN and...Ch. 19 - Break even analysis for a service company Sprint...Ch. 19 - Cost-volume-profit chart For the coming year,...Ch. 19 - Profit-volume chart Using the data for Loudermilk...Ch. 19 - Break-even chart Name the following chart, and...Ch. 19 - Break-even chart Name the following chart, and...Ch. 19 - Sales mix and break-even sales Dragon Sports Inc....Ch. 19 - Break-even sales and sales mix for a service...Ch. 19 - Margin of safety A. If Canace Company, with a...Ch. 19 - Break-even and margin of safety relationships At a...Ch. 19 - Operating leverage Beck Inc. and Bryant Inc. have...Ch. 19 - Items on variable costing income statement In the...Ch. 19 - Variable costing income statement On July 31,...Ch. 19 - Absorption costing income statement On June 30,...Ch. 19 - Classify costs Seymour Clothing Co. manufactures a...Ch. 19 - Break-even sales under present and proposed...Ch. 19 - Break-even sales and cost-volume-profit chart For...Ch. 19 - Break-even sales and cost-volume-profit chart Last...Ch. 19 - Sales mix and break even sales Data related to the...Ch. 19 - Contribution margin, break-even sales,...Ch. 19 - Classify costs Cromwell Furniture Company...Ch. 19 - Break-even sales under present and proposed...Ch. 19 - Break even sales and cost-volume-profit chart For...Ch. 19 - Break-even sales and cost-volume-profit chart Last...Ch. 19 - Sales mix and break even sales Data related to the...Ch. 19 - Contribution margin, break-even sales,...Ch. 19 - Ethics and professional conduct in business Edward...Ch. 19 - Break-even analysis Somerset Inc. has finished a...Ch. 19 - Variable costs and activity bases in decision...Ch. 19 - Variable costs and activity bases in decision...

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