# 6-2A - 65,000 Administrative expenses 52,000 Total fixed...

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(a) TYSON COMPANY CVP Income Statement (Estimated) For the Year Ending December 31, 2002 Net sales .......................................................................................... \$1,800,000 Variable expenses Cost of goods sold. ....................................................................... \$980,000 * Selling expenses. ......................................................................... 80,000 Administrative expenses. ............................................................. 20,000 Total variable expenses. .................................................. 1,080,000 Contribution margin. ................................................................................. 720,000 Fixed expenses Cost of goods sold. ....................................................................... 283,000 Selling expenses. .........................................................................

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Unformatted text preview: 65,000 Administrative expenses. ............................................................. 52,000 Total fixed expenses. ....................................................... 400,000 Net income .......................................................................................... \$ 320,000 *Direct materials \$400,000 + direct labor \$280,000 + variable manufacturing overhead \$300,000. (b) Variable costs = 60% of sales (\$1,080,000 ÷ \$1,800,000) or \$.24 per bottle (\$.40 X 60%). Total fixed costs = \$400,000. (1) \$.40X = \$.24X + \$400,000 \$.16X = \$400,000 X = 2,500,000 units (2) 2,500,000 X .40 = \$1,000,000 (c) Contribution margin ratio = (\$.40 – \$.24) ÷ \$.40 = 40% Margin of safety ratio = (\$1,800,000 – \$1,000,000) ÷ \$1,800,000 = 44% (rounded) (d) Required sales X = \$400,000 + \$150,000 = \$1,375,000 .40...
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## This note was uploaded on 04/18/2010 for the course ACCT 201 taught by Professor Prof.ck during the Spring '10 term at DeVry Chicago O'Hare.

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6-2A - 65,000 Administrative expenses 52,000 Total fixed...

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