I have no idea how this thing works. Could really use some to tell me how to makes the numbers make sense.
Below find production and sales information for Herrestad Company.
Selling price per unit
Variable costs per unit
Variable selling and administrative
Fixed manufacturing overhead
Fixed selling and administrative
Absorption Income Statement
For the period ending Dec. 31, 2011
Cost of goods sold
Gross profit (margin)
Selling and administrative expenses
Prepare a contribution margin (behavioral, variable) income statement for Herrestad Company. Prepare a second version assuming the selling price per unit increases to $280 per unit.
Use the original information to:
Determine the number of units the company must sell to break even for the year?
Compute break even assuming direct materials cost increase from $100 to $120, but all information remains the same.
The submission should be 2 to 4 pages and need to include answers to all the questions listed above. Show computations, discuss the results and include references in APA format.
Your tutorial is attached in Excel which gives you the ...
Your tutorial is attached in Excel which gives you the contribution margin income statement using variable costing (treats fixed manufacturing overhead as period cost). Breakeven formula for original data and revised material costs are shown and worked. As an illustration, a traditional multi-step income statement with gross profit computed is also shown for original data and the price change.