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Question

The following data are for Paso Robles Company for the year ended December 31, 2014: 

Costs:

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Direct material $ 90,000 

Direct labor 130,000 


Manufacturing overhead:


Variable 45,000 

Fixed 90,000 

Sales commissions (variable) 25,000 

Sales salaries (fixed) 20,000 

Administrative expenses (fixed) 35,000 

Selling price per unit $10

Units produced and sold  60,000 


Assume direct materials and direct labor are variable costs. Do a contribution margin income statement and a traditional income statement. 

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