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A Calgary manufacturer, Snowshoe Co . , sold 2 0 , 0 0 0 pairs of snowshoes in 2 0 1 1 . Below is

A Calgary manufacturer, Snowshoe Co., sold 20,000 pairs of snowshoes in 2011. Below is a
partial list of the company accounts:
Sales $1,500,000
Direct materials used $760,000
Direct Labour $95,000
Variable Manufacturing Overhead $152,000
Fixed Manufacturing Overhead $25,000
Variable Selling and Admin Expenses $120,000
Fixed Selling and Admin Expenses $40,000
There are 6,000 units in inventory at the beginning of the year and
5,000 units in inventory at the end of the year. The company uses
variable costing. There has been no change in the variable cost per unit
from 2010 to 2011.19,000 units were manufactured in 2011.
1. What is the variable cost of good manufactured cost per unit? List the components and show your calculations?
2. Prepare a contribution Format Income Statement?
3. What is the contribution ratio?
4. What is the contribution per unit?
5. What is the break even point in units?
6. What is the break even point in sales dollars?
7. How many units need to be sold to realize a net income of $300,000?
8. What amount will the ending inventory on the balance sheet be in dollars under the variable costing approach?
9. What is the cost per unit under absorption costing for 2011?
10. What amount will the ending inventory on the balance sheet be in dollars under the absorption costing approach?
10. Why is there absorption costing?

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