Question
DolCor, Inc. manufactures and sells two products: Debit and Credit. The following data were extracted from last months accounting records: Debit Credit Sales Revenue $180,000
DolCor, Inc. manufactures and sells two products: Debit and Credit. The following data were extracted from last months accounting records:
Debit | Credit | |
Sales Revenue | $180,000 | $190,000 |
Product Costs | $144,000 | $132,000 |
Period Costs | $26,400 | $28,000 |
Debits variable product costs consist of $45,000 of direct material, $24,000 of direct labor, and $36,000 of manufacturing overhead. The remainder of its product costs are traceable fixed manufacturing overhead. Debits period costs consist of $20,000 of sales commission paid as a percentage of sales revenue. The remainder of its period costs are allocated common fixed costs.
Credits variable cost percentage is 75%. Of its fixed costs, $11,000 are traceable. The remainder of its fixed costs are allocated common fixed costs.
Which of the following statements is incorrect?
A. Credits performance should be judged on a segment margin of $36,500.
B. Debits total traceable costs equal $39,000.
C. If Debit was expected to generate a segment margin of $18,000, it fell short of managements expectations by $2,000.
D. The companys operating income for the period equals $39,600.
E. Credits contribution margin percentage for the period is 25%.
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