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Summary Problem for Your Review PROBLEM Exhibit 6-1 contains data for the Block Company for the year just ended. The company makes industrial power drills. Exhibit 6-1 shows the costs of the plastic housing separately from the costs of the electrical and mechanical components. Answer each of the following questions independently. (Requirement 1 reviews Chapter 5.) A B A + B Electrical and Mechanical Plastic Industrial Components* Housing Drills Sales: 100,000 units, at $100 $10,000,000 Variable costs Direct materials $4,400,000 $ 500,000 $ 4,900,000 Direct labor 400,000 300,000 700,000 Variable factory overhead 100,000 200,000 300,000 Other variable costs 100,000 100,000 Sales commissions, at 10% of sales 1,000,000 1,000,000 Total variable costs $6,000,000 $1,000,000 $ 7,000,000 Contribution margin $ 3,000,000 Total fixed costs $2,220,000 $ 480,000 Operating income 2,700,000 $ 300,000 *Not including the costs of plastic housing (column B). Exhibit 6-1 Block Company Cost of Industrial Drills