XYZ Motors is assessing its CGS and administrative costs:

• Requirements:
  • Calculate the Cost of Goods Sold for the production of 1,000 vehicles:
    • Direct Materials: $5,000,000
    • Direct Labor: $2,000,000
    • Manufacturing Overhead: $1,000,000
• Determine SG&A expenses:
  • Sales Commissions: $500,000
  • Advertising Costs: $200,000
  • Administrative Salaries: $300,000

• Analyze the Contribution Margin per vehicle.

Recommend ways to reduce factory overhead costs while maintaining quality standards