Larcker Manufacturings cost accountant has provided you with the following information for January operations: Direct materials .
Question:
Larcker Manufacturing’s cost accountant has provided you with the following information for January operations:
Direct materials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $105 per unit
Fixed manufacturing overhead costs . . . . . . . . . . . . . . . . $675,000
Sales price . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $395 per unit
Variable manufacturing overhead . . . . . . . . . . . . . . . . . . $60 per unit
Direct labor. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $120 per unit
Fixed marketing and administrative costs . . . . . . . . . . . . $585,000
Units produced and sold . . . . . . . . . . . . . . . . . . . . . . . . . 30,000
Variable marketing and administrative costs . . . . . . . . . . $24 per unit
Required
Determine each of the following:
a. Variable cost.
b. Variable manufacturing cost.
c. Full absorption cost.
d. Full cost.
e. Profit margin.
f. Gross margin.
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
Step by Step Answer:
Fundamentals of Cost Accounting
ISBN: 978-0077398194
3rd Edition
Authors: William Lanen, Shannon Anderson, Michael Maher