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Sunn Company manufactures a single product that sells for $184 per unit and whose variable costs are $137 per unit. The company's annual fixed
Sunn Company manufactures a single product that sells for $184 per unit and whose variable costs are $137 per unit. The company's annual fixed costs are $632,000. The sales manager predicts that next year's annual sales of the company's product will be 40,200 units at a price of $202 per unit. Variable costs are predicted to increase to $142 per unit, but fixed costs will remain at $632,000. What amount of income can the company expect to earn under these predicted changes? Prepare a contribution margin income statement for the next year. The following costs result from the production and sale of 4,350 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $285 each. Variable costs Plastic for casing Wagen of assembly workers Drum stands Sales commissions Fixed costs Taxes on factory - Factory maintenance. Factory machinery depreciation Lease of equipment for salen staff Accounting staff salaries Administrative salaries $ 104,400 387,150 143,550 95,700 13,500 27,000 87,000 27,000 77,000 157,000 Required: 1. Prepare a contribution margin income statement for the year. 2. Compute contribution margin per unit and contribution margin ratio. 3. For each dollar of sales, how much is left to cover fixed costs and contribute to income? Sunn Company manufactures a single product that sells for $184 per unit and whose variable costs are $137 per unit. The company's annual fixed costs are $632,000. The sales manager predicts that next year's annual sales of the company's product will be 40,200 units at a price of $202 per unit. Variable costs are predicted to increase to $142 per unit, but fixed costs will remain at $632,000. What amount of income can the company expect to earn under these predicted changes? Prepare a contribution margin income statement for the next year. The following costs result from the production and sale of 4,350 drum sets manufactured by Tight Drums Company for the year ended December 31. The drum sets sell for $285 each. Variable costs Plastic for casing Wagen of assembly workers Drum stands Sales commissions Fixed costs Taxes on factory - Factory maintenance. Factory machinery depreciation Lease of equipment for salen staff Accounting staff salaries Administrative salaries $ 104,400 387,150 143,550 95,700 13,500 27,000 87,000 27,000 77,000 157,000 Required: 1. Prepare a contribution margin income statement for the year. 2. Compute contribution margin per unit and contribution margin ratio. 3. For each dollar of sales, how much is left to cover fixed costs and contribute to income?
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