Following is information pertaining to Dayton Co.'s operations of the first and second quarter of 2010:

Additional Information
• There were no finished goods at January 1, 2010.
• Dayton Co. writes off any quarterly underapplied or overapplied overhead as an adjustment to Cost of Goods Sold.
• Dayton Co.'s income tax rate is 35 percent.
a. Prepare a variable costing income statement for each quarter.
b. Calculate each of the following for 2010 if 260,000 units were produced and sold:
1. Unit contribution margin.
2. contribution margin ratio.
3. Total contribution margin.
4. Net income.
5. Degree of operating leverage.
6. Annual break-even unit sales volume.
7. Annual break-even dollar sales volume.
8. Annual margin of safety as a percentage.
9. Annual margin of safety inunits.

Transcribed Image Text:

QUARTER First Second Units Production Sales Expected activity level 60,000 65,000 S 75.00 60,000 70,000 65,000 $ 75.00 Unit selli Unit variable costs ing price Direct material Direct labor Factory overhead Selling and administrative 34.50 16.50 7.80 5.70 3450 16.50 7.80 5.70 2 2 Fixed costs Factory overhead Selling and administrative $195,000 42,800 $195,000 42,800