Company X manufactured & sold 1,000 Sabres during November. Selected data for this company are as follows:
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.
This solution uses an income statement to determining selling and administrative expenses, break-even point, units to be sold and the selling price.