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The summarized financial results for RJM are shown below: Gross sales: Less variable costs Direct materials Direct labor Total contribution margin Fixed costs Operating
The summarized financial results for RJM are shown below: Gross sales: Less variable costs Direct materials Direct labor Total contribution margin Fixed costs Operating income Current Year $1,155,000 Prior Year $1,600,000 371,250 720,000 534,600 800,000 $249,150 $80,000 180,000 150,000 $69,150 ($70,000) Operating data for the current and prior year: follow: Sales units Selling price Direct materials price per unit of material Direct materials required per unit Wage rate ($/hour) Direct labor hour required per unit Market size Current Year Prior Year 33,000 40,000 $35 $40 $15 $18 0.75 1 $9/hour 1.8 hours 300,000 $10/hour 2 hours 400,000
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