I don\'t know what to do with all the various costs for a CVP income statement i

Question

I don't know what to do with all the various costs for a CVP income statement in a variable analysis. 300,000 units sold. $8 per unit. Manufacturing costs based on production volume of 300,000 units. Direct materials .80 per unit; Direct Labor $10 per hour or $2 per unit; Packaging .75 per unit; Variable Manufacturing Overhead 1.20 per unit; Fixed Manufacturing Overhead $540,000. Selling and Admin Costs (based on sales volume of 300,000 units); Sales commisions .80 per unit; shipping costs .50 per unit; adversting and promotion (fixed) $180,000; fixed selling and Admin expenses $270,000. So what do I do with all the various costs? What is included as a fixed or variable cost?

Explanation / Answer

Variable costs Particulars Amount Direct material (300000*0.80) 240000 Direct labour(300000*2) 600000 Packaging (300000*0.75) 225000 Variable manufacturing overhead(300000*1.2) 360000 Sales commission (300000*0.80) 240000 Shipping(300000*0.50) 150000 Total variable cost 1815000 Fixed costs Particulars Amount Fixed manufacturing overhead 540000 Fixed advertising and promotion 180000 Fixed selling and administration 270000 Total fixed costs 990000

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