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    Selling and Administrative Expenses

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    Company X manufactured & sold 1,000 Sabres during November. Selected data for this company are as follows:
    Sales $100,000
    Direct Materials Used 21,000
    Direct Labor 16,000
    Variable manufacturing overhead 13,000
    Fixed Manufacturing overhead 14,000
    Variable selling and administrative expenses ???
    Fixed Selling & admin. Expenses ???
    Contribution Margin 40,000
    Operating Income 22,000

    There were no beginning or ending inventories.

    What were both the variable & mixed selling and admin. expenses for Nov.?

    What was the cost of good sold during November?

    Assume now that the fixed selling admin. expenses for Nov. amounted to $14,000
    What was the break even point in units for Nov.?
    How many units should be sold to earn a target operating income of $12,000?
    What would the selling price be if the company wanted to earn a operating income of $17,000 on the sale of 900 units.

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    Solution Summary

    This solution uses an income statement to determining selling and administrative expenses, break-even point, units to be sold and the selling price.