In: Accounting
Testing Inc. had the following amounts:
Direct materials $8 per unit
Direct Labor $15 per unit
Variable overhead $5 per unit
Fixed overhead $90,000
Variable selling expenses $3 per unit
Fixed selling and admin. expenses $150,000
75,000 units produced
60,000 units sold at $40 each
Calculate the VARIABLE product cost per unit and prepare a Contribution Margin Income Statement under Variable Costing in order to fill in the rest of the information. (Remember you can submit your calculations for possible partial credit.)
Variable product cost per unit $ =
Total Sales in dollars $ =
Contribution Margin $ =
Net Income $ =
Variable Cost per Unit | ||||||
Direct Material | $ 8.00 | |||||
Direct Labor | $ 15.00 | |||||
Variable Overhead | $ 5.00 | |||||
Variable Selling & Administerative cost | $ 3.00 | |||||
Total Variable cost per unit | $ 31.00 | |||||
Testing Inc. | ||||||
Variable Costing Income Statement | ||||||
Sales=(60000*$40)=(A) | $ 24,00,000.00 | |||||
Less: Variable Cost | ||||||
Direct Material=(60000*$8) | $ 4,80,000.00 | |||||
Direct Labor=(60000*$15) | $ 9,00,000.00 | |||||
Variable Overhead Cost=(60000*$5) | $ 3,00,000.00 | |||||
Variable Selling & Administerative Expenses=(60000*$3) | $ 1,80,000.00 | |||||
Total Variable Cost=(B) | $ 18,60,000.00 | |||||
Contribution Margin=(C )=(A)-(B) | $ 5,40,000.00 | |||||
Less: Fixed Expenses | ||||||
Fixed Selling & Administerative Expenses | $ 90,000.00 | |||||
Fixed Overhead Cost | $ 1,50,000.00 | |||||
Total Fixed Expenses=(D) | $ 2,40,000.00 | |||||
Net Income=(C)-D) | $ 3,00,000.00 |