Kimmei, Accounting, 6e Help I System Announcements CALCULATOR PRINTER VERSION BA

Question

Kimmei, Accounting, 6e Help I System Announcements CALCULATOR PRINTER VERSION BACK 90 NEXT Problem 19-2A Lorge Corporation has collected the following information after its first year of sales. Sales were $1,500,000 on 100,000 units, selling expenses $250,000 (40% variable and 60% fixed); direct materials $511,000, direct labor $290,000; administrative expenses $270,000 (20% variable and 80% fixed); and m anufacturing overhead $350,000 (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.

Explanation / Answer

Part A

MOS = Sales - Breakeven Sales

Sales = $ 3355000 and BES = $ 2355000. Thus MOS = $ 1000000

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