Question
Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget. The pro forma income statement for the current year is
Evergreen Corporation manufactures circuit boards and is in the process of preparing next year's budget. The pro forma income statement for the current year is presented below.
| Sales | $ | 3,900,000 | |||
| Cost of sales: | |||||
| Direct material | $ | 540,000 | |||
| Direct labor | 450,000 | ||||
| Variable overhead | 295,000 | ||||
| Fixed overhead | 800,000 | 2,085,000 | |||
| Gross profit | $ | 1,815,000 | |||
| Selling and General & Admin. Exp. | |||||
| Variable | 790,000 | ||||
| Fixed | 290,000 | 1,080,000 | |||
| Operating income | $ | 735,000 | |||
The contribution margin ratio for the current year is:
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Financial Accounting For Decision Makers
Authors: Dr Peter Atrill, Eddie Mclaney, Sin Autor
5th Edition
1405888210, 9781405888219
