Compu Services provides computerized inventory consulting. The office and comput

Question

Compu Services provides computerized inventory consulting. The office and computer expenses are $625,000 annually and are not assigned to specific jobs. The consulting hours available for the year total 20,000, and the average consulting hour has $30 of variable costs.

(c) If the desired profit is $60,000, what is the markup on variable costs to cover (1) unassigned costs and (2) desired profit? Round to the nearest whole percent.
Markup to cover unassigned costs %
Markup to cover desired profits %

Glendale Company sells its product at a unit price of $13.00. Unit manufacturing costs are direct materials, $2.50; direct labor, $3.00; and variable manufacturing overhead, $1.50. Total fixed manufacturing costs are $25,000 per year. Selling and administrative expenses are $1.00 per unit variable and $10,000 per year fixed. Though 25,000 units were produced during 2014, only 22,000 units were sold. There was no beginning inventory.

(a) Prepare a functional income statement using absorption costing. (Do not use negative signs with your answers.)

Glendale Company
Functional (Absorption Costing) Income Statement
For the year 2014

Sales

Cost of goods sold

Gross profit

Other expenses:

Variable selling and administrative

Fixed selling and administrative

Net income

b) Prepare a contribution income statement using variable costing. (Do not use negative signs with your answers.)

Glendale Company
Contribution (Variable Costing) Income Statement
For the Year 2014

Sales

Variable expenses:

Cost of goods sold

Selling and administrative

Contribution margin

Fixed expenses:

Manufacturing overhead

Selling and administrative

Net income

Glendale Company
Functional (Absorption Costing) Income Statement
For the year 2014

Sales

Cost of goods sold

Gross profit

Other expenses:

Variable selling and administrative

Fixed selling and administrative

Net income

Explanation / Answer

Solution.

Calculation for markup on variable costs to cover..

(1) unassigned costs and

(2) Desired profit.

Particulars Hour Amount Service hour          20,000 Office and computer expenses    625,000.00 Service Hour      20,000.00 Service Charge per hour               31.25 Desired Markup                 1.25 Average consulting hour               30.00

Related Questions

Navigate

• Browse (All)
• Browse C
• Subjects

---

---

Integrity-first tutoring: explanations and feedback only — we do not complete graded work. Learn more.