Cost Volume Profit Analysis Additional Issues a BE 133 During 2010 Nowak

# Cost volume profit analysis additional issues a be

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Cost-Volume-Profit Analysis: Additional IssuesaBE 133During 2010, Nowak Corporation produced 60,000 units and sold 55,000 for \$10 per unit. Variable manufacturing costs were \$4 per unit. Annual fixed manufacturing overhead was \$120,000 (\$2 per unit). Variable selling and administrative costs were \$1 per unit sold, and fixed selling and administrative costs were \$30,000.InstructionsPrepare a variable costing income statement. Ans: N/A, SO: 7, Bloom: AP, Difficulty: Medium, Min: 5-7, AACSB: Analytic, AICPA BB: Legal/Regulatory Perspective, AICPA FN: Reporting, AICPA PC: Problem Solving, IMA: Reporting a Solution 133 (5–7 min.) Sales (55,000 × \$10) \$550,000 Variable cost of goods sold (55,000 × \$4) \$220,000 Variable selling and administrative expenses (55,000 × \$1) 55,000 275,000 Contribution margin 275,000 Fixed manufacturing overhead 120,000 Fixed selling and administrative expenses 30,000 150,000 Net income \$125,000 a BE 134 During 2010, Nowak Corporation produced 60,000 units and sold 55,000 for \$10 per unit. Variable manufacturing costs were \$4 per unit. Annual fixed manufacturing overhead was \$120,000 (\$2 per unit). Variable selling and administrative costs were \$1 per unit sold, and fixed selling and administrative costs were \$30,000.InstructionsPrepare an absorption costing income statement. 19 - 29
Test Bank for Accounting, Third Edition EXERCISES Ex. 135Trail King manufactures mountain bikes. It has fixed costs of \$5,360,000. Trail King’s sales mix and contribution margin per unit is shown as follows:Sales MixContribution MarginDestroyer20%\$120Voyager55%\$ 60Rebel25%\$ 40InstructionsCompute the number of each type of bike that the company would need to sell in order to break even under this product mix.

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