AccuMeter manufactures and sells its only product (Z1) in lot sizes of 1,600 units. Because of this approach, lot (batch)-level costs are regarded as variable for CVP analysis. Presented is sales and cost information for the year:

Sales revenue (1)	$7,800,000
Direct materials (2)	2,400,000
Processing (3)	1,800,000
Setup (4)	600,000
Batch movement (5)	120,000
Order filling (6)	60,000
Fixed manufacturing overhead	1,600,000
Fixed selling and administrative	720,000

(1) 120,000 units at $65 (2) 120,000 units at $20 (3) 120,000 units at $15 (4) 240 lots at $2,500 (5) 240 lots at $500 (6) 240 lots at $250 Required a. Prepare a traditional contribution income statement in good form. Note: Do not use a negative sign with your answers in the statement with the exception of a net loss.

AccuMeter
Contribution Income Statement
For the Year
AnswerContribution marginGross marginNet income (loss)Operating profitSales		Answer
AnswerLess fixed costsLess mixed costsLess variable costs
Direct materials	Answer
Processing	Answer
Setup	Answer
Batch movement	Answer
Order filling	Answer	Answer
AnswerContribution marginGross marginNet income (loss)Operating profitSales		Answer
AnswerLess fixed costsLess mixed costsLess variable costs
Manufacturing overhead	Answer
Selling and administrative	Answer	Answer
AnswerContribution marginGross marginNet income (loss)Operating profitSales		Answer

b. Prepare a multi-level contribution income statement in good form. (Hint: First determine the appropriate cost hierarchy.) Note: Do not use a negative sign with your answers in the statement with the exception of a net loss.

AccuMeter
Multi-Level Contribution Income Statement
For the Year
AnswerContribution marginFacility-level contributionLess facility-level costsLess lot-level costsLess unit-level costsLot-level contributionNet income (loss)SalesUnit-level contribution		Answer
AnswerContribution marginFacility-level contributionLess facility-level costsLess lot-level costsLess unit-level costsLot-level contributionNet income (loss)SalesUnit-level contribution
Direct materials	Answer
Processing	Answer	Answer
AnswerContribution marginFacility-level contributionLess facility-level costsLess lot-level costsLess unit-level costsLot-level contributionNet income (loss)SalesUnit-level contribution		Answer
AnswerContribution marginFacility-level contributionLess facility-level costsLess lot-level costsLess unit-level costsLot-level contributionNet income (loss)SalesUnit-level contribution
Setup	Answer
Batch movement	Answer
Order filling	Answer	Answer
AnswerContribution marginFacility-level contributionLess facility-level costsLess lot-level costsLess unit-level costsLot-level contributionNet income (loss)SalesUnit-level contribution		Answer
AnswerContribution marginFacility-level contributionLess facility-level costsLess lot-level costsLess unit-level costsLot-level contributionNet income (loss)SalesUnit-level contribution
Manufacturing overhead	Answer
Selling and administrative	Answer	Answer
AnswerContribution marginFacility-level contributionLess facility-level costsLess lot-level costsLess unit-level costsLot-level contributionNet income (loss)SalesUnit-level contribution		Answer

c. What is the current contribution per lot (batch) of 1,600 units? $Answer d. Management is contemplating introducing a limited number of specialty products. One product would sell for $80 per unit and have direct materials costs of $35 per unit. All other costs and all production and sales procedures will remain unchanged. What lot (batch) size is required for a contribution of $800 per lot? Answer units