Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Show all supporting computations. 1. Hurst Co, manufacturers and sells a single product. Price and cost data regarding this product are as follows: Selling price..

image text in transcribed
image text in transcribed
Show all supporting computations. 1. Hurst Co, manufacturers and sells a single product. Price and cost data regarding this product are as follows: Selling price.. Variable manufacturing costs.............. Variable selling and administrative expenses........ Fixed manufacturing overhead....... Fixed selling and administrative expenses......... $40 per unit $20 per unit $6 per unit $208,000 per year $324.000 per year a. What is Hurst's Contribution Margin per unit? What is their contribution Margin Ratio? b. What is Hurst's break-even point in Units and in Dollars? c. How many units would Hurst Co. need to sell to make a target profit of $16,850? What would their sales dollars be at this level? d. What is the margin of safety in units and dollars assuming a current sales level of 43,480 units? e. Using the current sales level of 43,480, what is the operating leverage? Use the operating leverage to predict the increase in net income if sales increase by 20%. Prove the percentage increase predicted by preparing a contribution margin format income statement. Faxon Company, which has only one product, has provided the following data concerning its most recent month of operations: Selling price $137 Units in beginning inventory..... Units produced ................ Units sold................. Units in ending inventory, 3,000 2,900 100 Variable costs per unit: Direct materials Direct labor Variable manufacturing overhead......... Variable selling and administrative... $40 $53 $9 Fixed costs: Fixed manufacturing overhead. - $69.000 Fixed selling and administrative ......... $5,800 a. What is the product cost per unit using absorption costing? Using variable costing? b. What is the value of the ending inventory using absorption costing? Using variable costing? e. Prepare an income statement for the month using the absorption costing method (traditional income statement). d. Prepare an income statement for the month using the variable costing method and the contribution format income statement. c. Reconcile the variable costing and absorption costing net operating incomes for the month

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access to Expert-Tailored 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

Management Accounting

Authors: Anthony A Atkinson, Robert S Kaplan

5th Edition

136005314, 978-0136005315

More Books

Students also viewed these Accounting questions

Question

What is the purpose of the EEOC?

Answered: 1 week ago