Test #3 Managerial Acct Chapters(&) CVP & Short Term Decisions Acct Name Fall 20

Question

Test #3 Managerial Acct Chapters(&) CVP & Short Term Decisions Acct Name Fall 2017 Wri te your answers on a separate sheet of paper. SHOW ALL YOUR WORK. TO BE COMPLETED BY YOURSELF 1) The following information for the past year for the Blaine Corporation has been provided: Fixed costs: Manufacturing Marketing Administrative Variable costs: Manufacturing Marketing $125,000 23,000 21,000 30,000 43,000 Administrative During the year, the company produced and sold 30,000 units of product at a selling price of $15.00 per unit. There was no beginning inventory of product at the beginning of the year. (5 points) What is the operating income (oss for the year?

Explanation / Answer

Calculation of Operating Income (Loss) for the Year Sales (30000 units * $15) $450,000 Less : Cost of goods sold (30000 units * $8) $240,000 Gross Margin $210,000 Less : Marketing and administrative expenses $117,000 Operating Income $93,000 Cost of goods sold per unit = Total Manufacturing cost / Number of of units produced = $240000 / 30000 units = $8 per unit

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