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ABC Manufacturing Co. produces industrial equipment. Here are the financial figures for the year 2023: Ledgers (in $) Amount Direct Materials Used 4,500,000 Direct Labor
- ABC Manufacturing Co. produces industrial equipment. Here are the financial figures for the year 2023:
Ledgers (in $) | Amount |
Direct Materials Used | 4,500,000 |
Direct Labor Costs | 3,200,000 |
Manufacturing Overhead | 2,000,000 |
Administrative Expenses | 1,000,000 |
Sales Revenue | 12,000,000 |
- Requirements:
- Prepare ABC Manufacturing Co.'s income statement for the year ended December 31, 2023.
- Calculate the Cost of Goods Manufactured (CGM) and Cost of Goods Sold (CGS).
- Determine the Gross Profit Margin and Operating Income.
- Analyze the impact of a 15% increase in direct labor costs on profitability.
- Recommend cost-saving strategies to reduce manufacturing overhead by 10%.
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