Homework%20Ch%209%20Key

Homework%20Ch%209%20Key - Student _ ACCT 3270 Homework...

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___________________________ ACCT 3270 Homework Chapter 9 1. Peggy's Pillows produces and sells a decorative pillow for $75.00 per unit. In the first month of operation, 2,000 units were produced and 1,750 units were sold. Actual fixed costs are the same as the amount budgeted for the month. Other information for the month includes: Variable manufacturing costs $20.00 per unit Variable marketing costs $ 3.00 per unit Fixed manufacturing costs $ 7.00 per unit Administrative expenses, all fixed $15.00 per unit Ending inventories: Direct materials -0- WIP -0- Finished goods 250 units A. What is cost of goods sold per unit using variable costing? $20, only variable manufacturing costs are included when using variable costing. B. What is cost of goods sold using variable costing? $20 × 1,750 units = $35,000 C. What is contribution margin using variable costing? ($75 × 1,750) - [($20 + $3) × 1,750 units] = $91,000 D. What is operating income using variable costing? Contribution margin of $91,000 - [($7 + $15) × 2,000 units] = $47,000
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This note was uploaded on 10/12/2011 for the course ECON 101 taught by Professor Mikson during the Spring '08 term at Aarhus Universitet.

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Homework%20Ch%209%20Key - Student _ ACCT 3270 Homework...

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