Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Big City Seat Cushions Inc. makes seat cushions for outdoor furniture .Big Citys contribution margin income statement for the month ended March31, 2019 is presented

Big City Seat Cushions Inc. makes seat cushions for outdoor furniture

.Big Citys contribution margin income statement for the month ended

March31, 2019 is presented below: Big City Seat Cushions Inc. Income Statement For the Month Ended

March 31, 2019 Sales in Units 4,200 Sales Revenue $ 58,800 Variable Costs: Manufacturing 25,200 Selling and Administrative

11,000 Total Variable Costs 36,200 Contribution Margin 22,600 Fixed Costs: Manufacturing 12,500

Selling and Administrative 8,700 Total Fixed Costs 21,200 Operating Income $ 1,400

Big City gets a phone call from World wide Outdoor Furniture

They are interested in buying 480 cushions from Big City

. Acceptance of the order will not increase

Big Citys

variable selling and

administrative

costs.

Big City

has enough unused plant capacity to manufacture the a

ddition

al

cushions

(so

no increase in fixed costs)

.

Worldwide

has offered $

7

per

cushion

, which is below the normal sales of $1

4

per

cushion

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Cost Accounting Fundamentals Essential Concepts And Examples

Authors: Steven M. Bragg

3rd Edition

0980069998, 978-0980069990

More Books

Students also viewed these Accounting questions

Question

Does it avoid typos and grammatical errors?

Answered: 1 week ago