Whitman Corporation, a merchandising company, reported sales of 7,400 units for
ID: 2350548 • Letter: W
Question
Whitman Corporation, a merchandising company, reported sales of 7,400 units for May at a selling price of $677 per unit. The cost of goods sold (all variable) was $441 per unit and the variable selling expense was $54 per unit. The total fixed selling expense was $155,600. The variable administrative expense was $24 per unit and the total fixed administrative expense was $370,400.
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Whitman Corporation, a merchandising company, reported sales of 7,400 units for May at a selling price of $677 per unit. The cost of goods sold (all variable) was $441 per unit and the variable selling expense was $54 per unit. The total fixed selling expense was $155,600. The variable administrative expense was $24 per unit and the total fixed administrative expense was $370,400.
Explanation / Answer
Contribution format: Sales 7400 x 677 = $5,009,800 Variable expenses 1>General $441 = 441*7400=3263400$ 2>Selling Exp $ 54 =54*7400=399600$ 3>Adm.Exp. $ 24 =177600$ ----------- Total variable expense per unit=$519x7400=3840600$ Contribution = $5009800-3840600=1169200$ Fixed cost 155,600 + 370,400 = $ 526,000 Net income= 1169200-526000 = $ 643,200 Traditional Total cost of goods sold 7400 x 441 =3,263,400 7400 x 54 =399,600 7400x24 =177,600 fixed costs =155,600 " = 370,400 = 155600+370400=526000 ----------------- Total cost of goods =$4,366,600 income from Sales =7400x677 =$5,009,800 net income =643,200 cheers :)
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