Answered step by step
Verified Expert Solution
Link Copied!

Question

1 Approved Answer

Westside Winery Ltd. The company bottles wine from bulk wine purchases They are preparing next year's budget and have gathered the following costing information Variable

image text in transcribed
image text in transcribed
Westside Winery Ltd. The company bottles wine from bulk wine purchases They are preparing next year's budget and have gathered the following costing information Variable Cost Budget Information per Bottle Average wine cost 4.50 Bottle and packaging 2.50 Bottling labour 1.60 Shipping and delivery 2.00 The company also pays a sales commission of 10% to staff on sales revenue. Fixed Costs per Budget Information Month Salaries 8,500 Building lease 3,000 Office supplies, misc. 200 Utilities 1,500 Their annual sales budget targets and pricing are as follows. Average Price/Unit $ 17.00 Quantity 72,000 Annual Budget Targets Bottled wine sale Required: 1. Prepare the company's budget income statement for 2022 in a Contribution Margin format. Include the $/unit and percent of sales columns What is the contribution marain per unit and the contribution margin ratio? tv ZA Building lease Office supplies, misc. Utilities 8,500 3,000 200 1,500 Their annual sales budget targets and pricing are as follows. Annual Budget Targets Bottled wine sales Quantity 72,000 Average Price/Unit $ 17.00 Required: 1. Prepare the company's budget Income statement for 2022 in a contribution Margin format. Include the $/unit and percent of sales columns. What is the contribution margin per unit and the contribution margin ratio? 2. The manager is approached by a local business to offer its staff a unique seasonal gift bottle of wine. . The gift bottles would not have any sales commissions or shipping and delivery ft bottle wine is more expensive and would cost $5.50 for each bottle; all other costs are the same. one-time deal is estimated at 100 bottles. a. If the manager wants to earn a 20% contribution margin on the order, what price would he charge per bottle? b. What would the total contribution be for the seasonal gift bottle order

Step by Step Solution

There are 3 Steps involved in it

Step: 1

blur-text-image

Get Instant Access with AI-Powered 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

Income Tax Fundamentals 2013

Authors: Gerald E. Whittenburg, Martha Altus Buller, Steven L Gill

31st Edition

1111972516, 978-1285586618, 1285586611, 978-1285613109, 978-1111972516

Students also viewed these Accounting questions