The following data are from the accounting records of Niles Castings for year 2: Units produced and

Question:

The following data are from the accounting records of Niles Castings for year 2:
Units produced and sold . . . . . . . . . . . . . . . . . . . . . . . . . . . . 85,000
Total revenues and costs
Sales revenue . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . $264,000
Direct materials costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 68,000
Direct labor costs . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 34,000
Variable manufacturing overhead . . . . . . . . . . . . . . . . . . . . 17,000
Fixed manufacturing overhead . . . . . . . . . . . . . . . . . . . . . . 44,000
Variable marketing and administrative costs . . . . . . . . . . . 13,600
Fixed marketing and administrative costs . . . . . . . . . . . . . 32,000
Required
Prepare:
a. A gross margin income statement.
b. A contribution margin income statement.
Contribution Margin
Contribution margin is an important element of cost volume profit analysis that managers carry out to assess the maximum number of units that are required to be at the breakeven point. Contribution margin is the profit before fixed cost and taxes...
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Fundamentals of Cost Accounting

ISBN: 978-1259565403

5th edition

Authors: William Lanen, Shannon Anderson, Michael Maher

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