Question
Oriole Corporation has collected the following information after its first year of sales. Sales were $1,600,000on100,000units, selling expenses $220,000(40% variable and 60% fixed), direct materials
Oriole Corporation has collected the following information after its first year of sales. Sales were $1,600,000on100,000units, selling expenses $220,000(40% variable and 60% fixed), direct materials $490,000, direct labor $316,000, administrative expenses $284,000(20% variable and 80% fixed), and manufacturing overhead $356,000(70% variable and 30% fixed). Top management has asked you for a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year.
(a)
Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year.)
(1)
Contribution margin for current year
$
Contribution margin for projected year
$
(2)
Fixed Costs
$
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