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CompuDesk, Inc.

CompuDesk, Inc., makes an oak desk specially designed for personal computers. The desk sells for $200. Data for last year's operations follow:

Units Beginning Inventory 0
Units Produced 10,000
Units Sold 9,000
Units in Ending Inventory 1,000

Variable Costs per Unit:
Direct Materials $60
Direct Labor $30
Variable Manufacturing Overhead $10
Variable Selling and Administrative $20
Total Variable Cost per Unit $120

Fixed Costs:
Fixed Manufacturing Overhead $300,000
Fixed Selling and Administrative $450,000
Total Fixed Costs $750,000

1. Assume the company uses variable costing. Compute the unit cost for one computer desk.

2. Assume that the company uses variable costing. Prepare a contribution format income statement for the year.

3. What is the company's break even point in terms of units sold?

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CompuDesk, Inc., makes an oak desk specially designed for personal computers. The desk sells for $200. Data for last year's operations follow:

Units Beginning Inventory 0
Units Produced 10,000
Units Sold 9,000
Units in Ending Inventory 1,000

Variable Costs per Unit:
Direct Materials $60
Direct Labor $30
Variable Manufacturing Overhead $10
Variable Selling and Administrative $20
Total Variable Cost per Unit $120

Fixed Costs:
Fixed Manufacturing Overhead ...

$2.19