Problem 6-2A

Lorge Corporation has collected the following information after its first year of sales. Sales were $900,000on90,000units; selling expenses $250,000(40% variable and 60% fixed); direct materials $76,100; direct labor $240,000; administrative expenses $270,000(20% variable and 80% fixed); and manufacturing overhead $357,000(70% variable and 30% fixed). Top management has asked you to make 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.

Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year.

(1)Contribution margin for current year$

(2)Contribution margin for projected year$

(3)Fixed costs for current year$