Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Please help me with this problem,clearly explaib, thank you P5-GB Mega Electronix carries no inventories. Its product is manufactured only when a customer's order is

Please help me with this problem,clearly explaib, thank you

image text in transcribed
P5-GB Mega Electronix carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is made. For its scal year ended October 31, 2014, Mega's breakeven point was $2.4 million. On sales of $2 million, its income statement showed a gross prot of $400,000, direct materials cost of $600,000, and direct labor costs of $700,000. The contribution margin was $150,000, and variable manufacturing overhead was $200,000. Instructions (a) Calculate the following: 1. Variable selling and administrative expenses. 2. Fixed manufacturing overhead. 3. Fixed selling and administrative expenses. (b) Ignoring your answer to part (a), assume that xed manufacturing overhead was $100,000 and the xed selling and administrative expenses were $80,000. The market- ing vice president feels that if the company increased its advertising, sales could be increased by 15%. What is the maximum increased advertising cost the company can incur and still report the same income as before the advertising expenditure? (CGA adapted)

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered Solutions

See step-by-step solutions with expert insights and AI powered tools for academic success

Step: 2

blur-text-image

Step: 3

blur-text-image

Ace Your Homework with AI

Get the answers you need in no time with our AI-driven, step-by-step assistance

Get Started

Recommended Textbook for

Financial and Managerial Accounting

Authors: Carl S. Warren, James M. Reeve, Jonathan Duchac

12th edition

978-1133952428, 1285078578, 1133952429, 978-1285078571

Students also viewed these Accounting questions