Answered step by step
Verified Expert Solution
Question
1 Approved Answer
I need help with question 5 i got the rest Saint Elmo Company The Saint Elmo Company is a small home based manufacturing company that
I need help with question 5 i got the rest
Saint Elmo Company The Saint Elmo Company is a small home based manufacturing company that sells its product over the internet. The Chief Financial Officer, Mr. Sregor, has reviewed the 2019 operating income and had determined the nature of its costs as follows: Cost Direct Materials Variable Nature Variable Cost per unit Fixed Cost per month 57.80 $2.20 Direct Labor Variable Overhead Distribution Mixed Mixed N/A N/A 53.00 Administration Fixed $5,000 $12,000 To determine the overhead costs, Sregor decided to use the High/Low 6 months of 2019 as follows: method based on the results of the last Month Units Cost Sold 8,000 $42,000 August 7.500 $36,000 $30,000 October 5,000 $28,000 45,000 December 10,000 $48,000 July September 6,000 November l 9,500 For 2020 Saint Elmo is anticipating a sales price of $22.00 per unit and the same cost structure as 2018 had. Required: 1. From the 2019 Overhead data given above, calculate the per unit cost and the fixed cost per month using the high/low method. er unt Cost4 dolers 2. Calculate the projected monthly 2020 breakeven po int in units and sales dollars. Create an Income Statement in contribution margin format to verify the breakeven calculation. 3. Assuming the company is projecting sales of 6,000 units for January 2020; create an income statement in contribution margin format for the month. Calculate the margin of safety in units and sales dollars for January of 2020 using the results of parts 2 and 3 above. 4. Calculate the projected level of sales in units and dollars to earn an operating income of $30,00 for January of 2020. Create an Income Statement in contribution margin format to confirm the results 5 Step by Step Solution
There are 3 Steps involved in it
Step: 1
Get Instant Access to Expert-Tailored Solutions
See step-by-step solutions with expert insights and AI powered tools for academic success
Step: 2
Step: 3
Ace Your Homework with AI
Get the answers you need in no time with our AI-driven, step-by-step assistance
Get Started