Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Pharoah Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is made.

image text in transcribedimage text in transcribed

image text in transcribedimage text in transcribed

Pharoah Industries carries no inventories. Its product is manufactured only when a customer's order is received. It is then shipped immediately after it is made. For its fiscal year ended October 31, 2020, Pharoah's break-even point was $1.36 million. On sales of $1.18 million, its income statement showed a gross profit of $154,000, direct materials cost of $404,000, and direct labor costs of $500,000. The contribution margin was $118,000, and variable manufacturing overhead was $50,000. Calculate the following: 1. Variable selling and administrative expenses. $ 2. Fixed manufacturing overhead. LA $ 3. Fixed selling and administrative expenses. $ Ignore your answer to above part, assume that fixed manufacturing overhead was $100,000 and the fixed selling and administrative expenses were $82,000. The marketing vice president feels that if the company increased its advertising, sales could be increased by 20%. What is the maximum increased advertising cost the company can incur and still report the same income as before the advertising expenditure? Maximum increased advertising expenditure $

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

Using Financial Accounting Information The Alternative to Debits and Credits

Authors: Gary A. Porter, Curtis L. Norton

10th edition

978-1337276337, 1337276332, 978-1337517546, 1337517542, 978-1337491471

More Books

Students also viewed these Accounting questions

Question

What are the required elements of a security interest?

Answered: 1 week ago