Question
3. Whitman Corporation, a merchandising company, reported sales of 7,400 units for May at a selling price of $677 per unit. The cost of goods
3. | Whitman Corporation, a merchandising company, reported sales of 7,400 units for May at a selling price of $677 per unit. The cost of goods sold (all variable) was $3,263,400 and the variable selling expense was $54 per unit. The total fixed selling expense was $155,600. The variable administrative expense was $24 per unit and the total fixed administrative expense was $370,400. Assume the following changes for June, sales increase to 7,600 units, the selling price increases $23 per unit, and the fixed selling expense increases by $44,400. Required: Show a contribution format income statement for May and another for June. Calculate the contribution margin ratio and variable expense ratio for both May and June. What is the break-even point in sales dollars for May and June?
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