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Computer Supply, Inc. manufactures memory cards that sell to wholesalers for $2.00 each. Variable and fixed costs are as follows: + Variable Costs per
Computer Supply, Inc. manufactures memory cards that sell to wholesalers for $2.00 each. Variable and fixed costs are as follows: + Variable Costs per Card: Fixed Costs per Month: Manufacturing: Factory overhead $7,000 Direct materials $0.30 Selling and admin. 3,000 Direct labor $0.25 Factory overhead $0.25 $0.80 Selling and admin. $0.15 Total $0.95 Total $10,000 The company produced and sold 10,000 cards during October 2021. There were no beginning or ending inventories. Required: a. Prepare a contribution income statement for the month of October in proper form with a complete heading. b. Determine Computer Supply's monthly break-even point in units. C. Determine the effect on monthly profit of a 1,000-unit increase in monthly sales. d. If Computer Supply is subject to an income tax of 40 percent, determine the dollar sales volume required to earn a monthly after-tax profit of $15,000. Remember to make all calculations clear. It is highly recommended that you use Excel for this and let Excel do the calculations.
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