Income Statement & Break$-$Even Analysis

Climb Tire Sales Inc.

Climb Tire Sales Inc makes their own specialty tires. The Special tire is called the Chubb $5,000.$ The following is a list of the Costs and Sales for Climb Tires.

Construct an Income Statement in the correct format $=25$pts

Cost of rubber used for the tires $94,740$

Returns $2,500$

Administrative expenses $3,430$

Employee benefits $(67\%$ Fixed$)37,520$

Cost of steel belts used for the tires $43,174$

Chubb $5000$ tire sales $200,000$

Salaries and Wages $(38\%$ Variable$)155,500$

Utilities $33,470$

Legal Retainer $5,000$

Cleaning Supplies $2,000$

Allowances $3,500$

All weather tire sales $100,000$

Depreciation $($equipment$)24,400$

Cost of polyester cords used for the tires $31,580$

Taxes $5,050$

$20$inch Platinum Rim Sales $225,500$

Interest Expense $3,050$

Rent $42,550$

Advertising $4,700$

$25$pts

Construct a Sales, Cost, Volume, equation?

$2.$What is the Variable rate?

$3.$What is the Contribution rate?

$4.$What is Break Even in terms of dollars?

If sales per unit is $40\mathrm{.}00$ per tire how many tires $($units$)$ will have to be sold in order to break even?

$6.$What level of sales in dollars will be required to make a profit of $95,000$ and how many tires $($units$)$ will need to be sold to achieve this profit level $?$

Cost of Goods Sold Problem

The following information relates to the Climb Tire Company:

Inventory Values June$1$ June$30$

Direct Materials $75,00068,000$

Work In Progress $157,000178,000$

Finished Goods $96,00081,000$

Production Data for the Month of June:

Direct Labor $235,000$

Actual Factory Overhead $145,200$

Direct Materials Purchased $185,000$

Climb Tire Company uses one factory over$-$head account and applies factory overhead to production at $68\%$ of direct labor cost. Over$-$and$-$Under applied overhead is not recognized until year end

$20$ points

What is the total manufacturing costs for Climb Tires Inc. during the month of June?

What is the cost of goods transferred to the Finished Goods Inventory during June?

What is the cost of goods sold for June?