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P3-38, Multi-Level Profitability Analysis AccuMeter manufactures and sells its only product (Z1) in lot sizes of 500 units. Because of this ap proach, lot (batch)-level
P3-38, Multi-Level Profitability Analysis AccuMeter manufactures and sells its only product (Z1) in lot sizes of 500 units. Because of this ap proach, lot (batch)-level costs are regarded as variable for CVP analysis. Presented is sales and cost information for the year 2017: L06 Sales revenue (50,000 units at $45) Direct materials (50,000 units at $12) Processing (50,000 units at $18) Setup (100 lots at $2,000) Batch movement (100 lots at S400) Order filling (100 lots at $200) Fixed manufacturing overhead. Fixed selling and administrative $2,250,000 600,000 900,000 200,000 40,000 20,000 800,000 300,000 Chapter 3 Cost-Vclume-Profit Analysis and Planning 105 Required a. Prepare a traditional contribution income statement in good form. b. Prepare a multi-level contribution income statement in good form. (Hint: First determine the ap propriate cost hierarchy.) c. What is the current contribution per lot (batch) of 500 units? d. Management is contemplating introducing a limited number of specialty products. One product would sell for $65 per unit and have direct materials costs of S17 per unit. All other costs and all production and sales procedures will remain unchanged. What lot (batch) size is required for a con tribution of S700 per lot
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