Question
In: Accounting
XYZ Company reported the following information: June July Cost A $18,000 $0.20 per unit Cost B...
XYZ Company reported the following information: June July Cost A $18,000 $0.20 per unit Cost B $19,000 $29,800 Cost C $17,000 $0.34 per unit Units sold 50,000 units 90,000 units XYZ Company expects to sell 76,000 units in August at a selling price of $1.50 per unit Calculate the amount of net income XYZ Company would expect to earn in August.
Solutions
Expert Solution
| June | July | ||||
| A | $18,000 | $0.20 | |||
| B | $19,000 | $29,800 | |||
| C | $17,000 | $0.34 | |||
| Units | 50,000 | 90,000 | |||
| For A cost are fixed, whatever be the units, and for C cost are variable | |||||
| For B there is some cost are fixed, which have to calculate by indifference point | |||||
| Indifference point | |||||
| B | $19,000 | $29,800 | $10,800 | ||
| 50,000 | 90,000 | 40,000 | |||
| Variable cost | $0.27 | ||||
| Fixed cost | $5,500 | ||||
| For August | |||||
| Units | 76,000 | ||||
| Sales | $114,000 | ||||
| Cost A | $18,000 | ||||
| Cost B | |||||
| Variable cost | $20,520 | ||||
| Fixed cost | $5,500 | ||||
| Cost C | $25,840 | ||||
| Net income | $44,140 | ||||
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