edugen.wileyplus.com ilauDII Kimmel, Accounting, 6e CALCULATOR PRINTER VERSION B

Question

edugen.wileyplus.com ilauDII Kimmel, Accounting, 6e CALCULATOR PRINTER VERSION BACK NEXT Problem 18-5A (Part Level Submission) Viejo! Corporation has collected the following information after its first year of sales. Sales were $1,300,000 on 130,000 units, selling expenses $210,000 (40% variable and 60% fixed), direct materials $494,000, direct labor $83,000, administrative expenses $282,000 (20% variable and 80% fixed), and manufacturing overhead $368,000 (70% variable and 30% fixed). Top management has asked you to do a CVP analysis so that it can make plans for the coming year. It has projected that unit sales will increase by 10% next year. ? (a) Your answer is correct. Compute (1) the contribution margin for the current year and the projected year, and (2) the fixed costs for the current year. (Assume that fixed costs will remain the same in the projected year.) (1) Contribution margin for current year 325,000 357,500 462,000 Click if you would like to Show Work for this question: Contribution margin for projected years (2) Fixed Costs Open Show Work

Explanation / Answer

Dear Student Thank you for using Chegg Please find below the answer    Statementshowing Computations Paticulars Amount Projected Year Sales 1,300,000.00     1,430,000.00 Less Variable Expenses: Selling expenses         84,000.00           92,400.00 Direct materials       494,000.00         543,400.00 Direct Labour         83,000.00           91,300.00 Admin expenses         56,400.00           62,040.00 Manufacturing overhead       257,600.00         283,360.00 Total Variable Costs       975,000.00     1,072,500.00 Contribution Margin       325,000.00         357,500.00 Fixed cost Selling expenses       126,000.00         126,000.00 Admin expenses       225,600.00         225,600.00 Manufacturing overhead       110,400.00         110,400.00 Total Fixed costs       462,000.00         462,000.00 Net operating income    (137,000.00)      (104,500.00) Contribution per unit =325000/130,000                    2.50 BEP in Units= 462,000/2.50       184,800.00 Contribution margin ratio = 325,000/1300,000 25.00% BEP in $ = 462000/25% 1,848,000.00

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