INTRO TO MANAGERIAL ACCT-CONNECT ACCESS
8th Edition
ISBN: 9781260118742
Author: BREWER
Publisher: MCG
expand_more
expand_more
format_list_bulleted
Question
thumb_up100%
Chapter 7, Problem 3F15
To determine
Total contribution Margin under variable costing:
Contribution margin we find by reducing all the variable costs of a product from its sales. Simply, contribution is selling price minus variable costs. Thus the total contribution represents the total earning available to recover its fixed expenses and to generate profit.
To Compute:
The Total contribution margin under variable costing
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solutionStudents have asked these similar questions
Arctic Air Inc. manufactures cooling units for commercial
buildings. The price and cost of goods sold for each unit are as
follows:
Category
Per Unit Dollar Amount
Price
$60,000
Cost of goods sold
Gross profit
28,000
32,000
In addition, the company incurs selling and administrative
expenses of $226,250. The company wishes to assign these costs
to its three major customers, Gough Industries, Breen Inc., and
The Martin Group. These expenses are related to three major
nonmanufacturing activities: customer service, project bidding,
and engineering support. The engineering support is in the form
of engineering changes that are placed by the customer to
change the design of a product. The budgeted activity costs and
activity bases associated with these activities are:
Budgeted Activity Cost
Activity Base
$51,500 Number of service requests
Activity
Customer service
Project bidding
Engineering support
64,000 Number of bids
110,500 Number of customer design changes
Total costs
226,000…
O’Brien Company manufactures and sells one product. The following information pertains to each of the company’s first three years of operations:
During its first year of operations, O’Brien produced 100,000 units and sold 80,000 units. During its second year of operations, it produced 75,000 units and sold 90,000 units. In its third year, O’Brien produced 80,000 units and sold 75,000 units. The selling price of the company’s product is $75 per unit.
Required:
Assume the company uses absorption costing and a FIFO inventory flow assumption (FIFO means first-in first-out. In other words, it assumes that the oldest units in inventory are sold first):
Compute the unit product cost for Year 1, Year 2, and Year 3.
Prepare an income statement for Year 1, Year 2, and Year 3.
Assume the company uses absorption costing and a LIFO inventory flow assumption (LIFO means last-in, first-out. In other words, it assumes that the newest units in inventory are sold first):
Compute the unit…
Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per
unit over the relevant range of 66,000 to 106,000 units is given below:
Required:
1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below.
2. Assume that the company produces and sells 96,000 units during the year at a selling price of $8.65 per unit. Prepare a
contribution format Income statement for the year.
Complete this question by entering your answers in the tabs below.
Required 1
Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit
variable cost and fixed cost to 2 decimal places.)
Total cost:
Variable cost
Fixed cost
Total cost
Cost per unit:
Variable cost
Required 2
Fixed cost
Total cost per unit
S
S
S
66,000
Units Produced and Sold
198,000
400,000
598,000 S
0.00
S
86,000
10 S
0.00 S
106,000
0.00
2
Chapter 7 Solutions
INTRO TO MANAGERIAL ACCT-CONNECT ACCESS
Ch. 7 - What is the difference between absorption costing...Ch. 7 - Are selling and administrative expenses treated as...Ch. 7 - Explain how fixed manufacturing overhead costs are...Ch. 7 - What are the arguments in favor of treating fixed...Ch. 7 - What are the arguments in favor of treating fixed...Ch. 7 - Prob. 6QCh. 7 - If the units produced exceed the units sold, which...Ch. 7 - Prob. 8QCh. 7 - Prob. 9QCh. 7 - How does Lean Production reduce or eliminate the...
Ch. 7 - Prob. 11QCh. 7 - Prob. 12QCh. 7 - Distinguish between a traceable fixed cost and a...Ch. 7 - Explain how the contribution margin differs from...Ch. 7 - Why aren’t common fixed costs allocated to...Ch. 7 - How is it possible for a fixed cost that ¡s...Ch. 7 - Should a company allocate its common fixed costs...Ch. 7 - Prob. 1AECh. 7 - Prob. 2AECh. 7 - Prob. 3AECh. 7 - Diego Company manufactures one product that is...Ch. 7 - Prob. 2F15Ch. 7 - Prob. 3F15Ch. 7 - Prob. 4F15Ch. 7 - Diego Company manufactures one product that is...Ch. 7 - Prob. 6F15Ch. 7 - Diego Company manufactures one product that is...Ch. 7 - Prob. 8F15Ch. 7 - Diego Company manufactures one product that is...Ch. 7 - Prob. 10F15Ch. 7 - Prob. 11F15Ch. 7 - Prob. 12F15Ch. 7 - Prob. 13F15Ch. 7 - Diego Company manufactures one product that is...Ch. 7 - Diego Company manufactures one product that is...Ch. 7 - Prob. 1ECh. 7 - Variable Costing Income Statement; Explanation of...Ch. 7 - Reconciliation of Absorption and Variable Costing...Ch. 7 - Prob. 4ECh. 7 - Prob. 5ECh. 7 - Prob. 6ECh. 7 - Prob. 7ECh. 7 - Deducing Changes ¡n Inventories LO7—3 Parker...Ch. 7 - Variable and Absorption Costing Unit Product Costs...Ch. 7 - Prob. 10ECh. 7 - Segmented Income Statement L07—4 Wingate Company,...Ch. 7 - Prob. 12ECh. 7 - Prob. 13ECh. 7 - Variable Costing Unit Product Cost and Income...Ch. 7 - Absorption Costing Unit Product Cost and Income...Ch. 7 - Working with a Segmented Income Statement;...Ch. 7 - Prob. 17ECh. 7 - Prob. 18PCh. 7 - Variable Costing Income Statement; Reconciliation...Ch. 7 - Variable and Absorption Costing Unit Product Costs...Ch. 7 - Segment Reporting and Decision-Making L07—4 Vulcan...Ch. 7 - Prob. 22PCh. 7 - Absorption and Variable Costing; Production...Ch. 7 - Companywide and Segment Break-Even Analysis;...Ch. 7 - Prepare and Interpret Income Statements; Changes...Ch. 7 - Prob. 26PCh. 7 - Variable and Absorption Costing Unit Product Costs...
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 64,000 to 104,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 94,000 units during the year at a selling price of $8.62 per unit. Prepare a contribution format income statement for the year. Answer is complete but not entirely correct. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Units Produced and Sold 64,000 84,000 104,000 Total costs: Variable costs $ 198,400 260,400 V 322,400 O Fixed costs 380,000 630,000 X 780,000 X Total costs 2$ 578,400 $ 890,400 $ 1,102,400 Cost…arrow_forwardHarris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 57,000 to 97,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 87,000 units during the year at a selling price of $7.69 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Total cost: Variable cost Fixed cost Total cost Cost per unit: Variable cost Fixed cost Total cost per unit $ $ 57,000 Units Produced and Sold 77,000 136,800 330,000 466,800arrow_forwardHarris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 56,000 to 96,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 86,000 units during the year at a selling price of $8.73 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) 56,000 Units Produced and Sold 76,000 Units Produced and Sold 96,000 Units Produced and Sold Total costs: $ $ 0 $ Variable costs Fixed costs Total costs Cost per unit: Variable cost Fixed cost Total cost per unit 123,200 420,000 543,200 $…arrow_forward
- Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 63,000 to 103,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 93,000 units during the year at a selling price of $9.14 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Total costs: Variable costs Fixed costs Total costs Cost per unit: Variable cost Fixed cost Total cost per unit 63,000 Units Produced and Sold $ $ $ 83,000 Units Produced and Sold 163,800 460,000 623,800 $ 0.00 $ 103,000 Units Produced and…arrow_forwardPierre Corporation manufactures a single product that it sells for $122 per unit. The company had the following cost structure thsi year: Variable Manufacturing Cost per unit: $27 Variable Selling and Administrative cost per unit: $14 Fixed Manufacturing Cost, Total: $2,713,000 Fixed Selling and Administrative Costs, Total: $1,282,000 There were no units in beginning inventory. During the year, 93,000 units were produced and 86,000 units were sold. Under absorption costing, the unit product cost is: Select one: A. $56.17 B. $87.45 C. $28.91 D. $70.17 E. $55.91arrow_forwardHarris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 55,000 to 95,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 85,000 units during the year at a selling price of $7.40 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per variable cost and fixed cost to 2 decimal places.) Total cost: Variable cost Fixed cost Total cost Cost per unit: Variable cost Fixed cost Total cost per unit 55,000 Units Produced and Sold $ $ 132,000 300,000 432,000 75,000 Units Produced and Sold 95,000 Units Produced and Soldarrow_forward
- Conner's Fixtures produces and sells a single product, a specialized plumbing fixture. The business began operations on January 1 this year and its costs incurred during the year include the following: Variable costs (based on units produced): Direct materials cost Direct manufacturing labor costs Indirect manufacturing costs Administration and marketing Fixed costs: Administration and marketing costs Indirect manufacturing costs At the end of the first year (December 31), direct materials inventory consisted of 7,500 pounds of material. Production in that year was 10,000 fixtures. All prices and unit variable costs remained constant during the year. Sales revenue for year 1 was $293,250. Finished goods inventory was $24,420 on December 31. Each finished fixture requires 3.20 pounds of material. Required: L a. Compute the direct materials inventory cost, December 31. b. Compute the finished goods ending inventory in units (fixtures) on December 31. c. Compute the selling price per…arrow_forwardHarris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 55,000 to 95,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 85,000 units during the year at a selling price of $8.67 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Total cost: Variable cost Fixed cost Total cost Cost per unit: Variable cost Fixed cost Total cost per unit $ $ 55,000 Units Produced and Sold 75,000 187,000 320,000 507,000 95,000arrow_forwardHarris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 55,000 to 95,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 85,000 units during the year at a selling price of $8.90 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Total cost: Variable cost Fixed cost Total cost Cost per unit: Variable cost Fixed cost Total cost per unit 55,000 Units Produced and Sold $ $ $ 75,000 Units Produced and Sold 192,500 330,000 522,500 $ 0.00 $ 95,000 Units Produced and Sold…arrow_forward
- Harris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 62,000 to 102,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 92,000 units during the year at a selling price of $10.34 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Total costs: Variable cost Fixed cost Total costs Cost per unit: Variable cost Fixed cost Total cost per unit + $ $ $ Units Produced and Sold 62,000 82,000 254,200 430,000 684,200 $ 4.10 6.94 11.04 $ 0 0.00 $ $ 102,000 0 0.00arrow_forwardHarris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 52,000 to 92,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 82,000 units during the year at a selling price of $11.11 per unit. Prepare a contribution format Income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. (Round the per unit variable cost and fixed cost to 2 decimal places.) Total cost: Variable cost Fixed cost Total cost Cost per unit: Variable cost Fixed cost Total cost per unit 52,000 Units Produced and Sold $ $ 208,000 440,000 648,000 72,000 Units Produced and Soldarrow_forwardHarris Company manufactures and sells a single product. A partially completed schedule of the company's total costs and costs per unit over the relevant range of 68,000 to 108,000 units is given below: Required: 1. Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. 2. Assume that the company produces and sells 98,000 units during the year at a selling price of $8.42 per unit. Prepare a contribution format income statement for the year. Complete this question by entering your answers in the tabs below. Required 1 Required 2 Complete the schedule of the company's total costs and costs per unit as given in the relevant tab below. Note: Round the per unit variable cost and fixed cost to 2 decimal places. Total cost: Variable cost Fixed cost Total cost Cost per unit: Variable cost Fixed cost Total cost per unit $ $ $ 68,000 Units Produced and Sold 88,000 210,800 380,000 590,800 $ 3.10 5.59 8.69 $ 272,800 380,000 652,800 $ 3.10 4.32 7.42…arrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
- AccountingAccountingISBN:9781337272094Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.Publisher:Cengage Learning,Accounting Information SystemsAccountingISBN:9781337619202Author:Hall, James A.Publisher:Cengage Learning,
- Horngren's Cost Accounting: A Managerial Emphasis...AccountingISBN:9780134475585Author:Srikant M. Datar, Madhav V. RajanPublisher:PEARSONIntermediate AccountingAccountingISBN:9781259722660Author:J. David Spiceland, Mark W. Nelson, Wayne M ThomasPublisher:McGraw-Hill EducationFinancial and Managerial AccountingAccountingISBN:9781259726705Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting PrinciplesPublisher:McGraw-Hill Education
Accounting
Accounting
ISBN:9781337272094
Author:WARREN, Carl S., Reeve, James M., Duchac, Jonathan E.
Publisher:Cengage Learning,
Accounting Information Systems
Accounting
ISBN:9781337619202
Author:Hall, James A.
Publisher:Cengage Learning,
Horngren's Cost Accounting: A Managerial Emphasis...
Accounting
ISBN:9780134475585
Author:Srikant M. Datar, Madhav V. Rajan
Publisher:PEARSON
Intermediate Accounting
Accounting
ISBN:9781259722660
Author:J. David Spiceland, Mark W. Nelson, Wayne M Thomas
Publisher:McGraw-Hill Education
Financial and Managerial Accounting
Accounting
ISBN:9781259726705
Author:John J Wild, Ken W. Shaw, Barbara Chiappetta Fundamental Accounting Principles
Publisher:McGraw-Hill Education
Job Costing and Spoilage | Topic 2 | Spoilage, Re-work, and Scrap; Author: Samantha Taylor;https://www.youtube.com/watch?v=VP55_W2oXic;License: CC-BY