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Brass Values produces two t following income statement und produces two types of valves used in production equipment. Brass Values reported the come statement under
Brass Values produces two t following income statement und produces two types of valves used in production equipment. Brass Values reported the come statement under absorption costing for the year ended December 31, 2019. Brass Values Income Statement - Absorption Costing For the Year Ending December 31, 2019 Sales Revenue $1,625,000 Cost of Goods Sold 1,070,000 Gross Profit 555,000 Operating Expenses 495,000 Income from Operations $60,000 The company president is very unhappy with the results and would like to have more information on the contribution provided by each of the two products to overall company profit. The controller has provided the following information: Unit Sales Fixed Manufacturing Cost Fixed Non-Manufacturing Cost Contribution Margin Ratio Revenue % of Total Variable Manufacturing Cost Valve 1 25,000 $125,000 $85,000 20% $625,000 50% Valve 2 50,000 $145,000 $110,000 40% $1,000,000 50% The number of units produced in 2019 is equal to the number of units sold. Use the information provided to produce a contribution margin income statement under variable costing to show the contribution of the two products to total income from operations. Chapter 6 Analysis The president was thinking about an advertising campaign that is expected to change the and 2 to 35,000 and 45,000, respectively, as the company would pick up new customers but customers of valve 2 would switch their purchases to valve 1. What would be the effect of thi before considering the cost of the advertising campaign? ange the sales of valves tomers but some cute e effect of this promotion Per Unit Valve 1 Valve 2 Valve 1 Valve 2 Total
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