Question 7 (0.75 points) DM used $107,400 $70,000 $29,000 $52.800 DL Variable MOH Fixed MOH Variable selling and administrative expenses Fixed selling and administrative expenses $11,000 $12,300 Violins-by-Lucy produces student-grade violins for beginning violin students. The company produced 2,400 violins in its first month of operations. At month-end, 6 finished violins remained unsold. There was no inventory in work in process. Violi were sold for $122.50 each. Total costs from the month are listed above. The company prepares traditional (absorption costing) income statements for its bankers. Lucy would also like to prepare contribution margin income statements f management use. Compute the following amounts: 1. Gross Profit 2. Contribution Margin 3. Total expenses shown BELOW the GP line 4. Total expenses shown BELOW the CM line 5. Dollar value of ending inventory under absorption costing 6. Dollar value of ending inventory under variable costing. 7. Why is there a difference in operating income. Reconcile the difference. Question 7 (0.75 points) DM used $107,400 DL $70,000 Variable MOH $29,000 Fixed MOH $52.800 Variable selling and administrative $11,000 14.00 expenses Fixed selling and administrative $12.300 expenses Violins-by-Lucy produces student-grade violins for beginning violin students. The company produced 2,400 violins in its first month of operations. At month-end, 650 finished violins remained unsold. There was no inventory in work in process. Violins were sold for $122.50 each. Total costs from the month are listed above. The company prepares traditional (absorption costing) income statements for its bankers. Lucy would also like to prepare contribution margin income statements for management use. Compute the following amounts: 1. Gross Profit 2. Contribution Margin 3. Total expenses shown BELOW the GP line 4. Total expenses shown BELOW the CM line 5. Dollar value of ending inventory under absorption costing 6. Dollar value of ending inventory under variable costing 7. Why is there a difference in operating income. Reconcile the difference
