Behavioral, variable, income statement CVP for Lewis Company
Not what you're looking for?
We're using a different fictitious company for the last two modules, the managerial accounting portion of this course. Below find production and sales information for Lewis Company.
Product information Prod B
Beginning inventory 0
Units produced 10,000
Units sold 9,000
Selling price per unit $300
Variable costs per unit
Direct material 120
Direct labor 60
Variable overhead 40
Variable selling and administrative 10
Fixed costs
Fixed manufacturing overhead 250,000
Fixed selling and administrative 100,000
Lewis Company
Absorption Income Statement
For the period ending Dec. 31, 2012
Sales $2,700,000
Cost of goods sold 2,205,000
Gross profit (margin) $495,000
Selling and administrative expenses 180,000
Net income $315,000
Required:
Prepare a contribution margin (behavioral, variable) income statement for Lewis Company. Prepare a second version assuming the selling price per unit increases to $320 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 $120 to $140, but all information remains the same.
Purchase this Solution
Solution Summary
Your tutorial is attached. This shows you the contribution margin format under absorption costing and variable costing and reconciles the difference in profit between these two methods. Breakeven in units is computed and then done again with the $20 increase in variable cost per unit (materials).
Solution Preview
Your tutorial is attached. This shows you the contribution margin format ...
Education
- BSc, University of Virginia
- MSc, University of Virginia
- PhD, Georgia State University
Recent Feedback
- "hey just wanted to know if you used 0% for the risk free rate and if you didn't if you could adjust it please and thank you "
- "Thank, this is more clear to me now."
- "Awesome job! "
- "ty"
- "Great Analysis, thank you so much"
Purchase this Solution
Free BrainMass Quizzes
Social Media: Pinterest
This quiz introduces basic concepts of Pinterest social media
Business Ethics Awareness Strategy
This quiz is designed to assess your current ability for determining the characteristics of ethical behavior. It is essential that leaders, managers, and employees are able to distinguish between positive and negative ethical behavior. The quicker you assess a person's ethical tendency, the awareness empowers you to develop a strategy on how to interact with them.
Balance Sheet
The Fundamental Classified Balance Sheet. What to know to make it easy.
Motivation
This tests some key elements of major motivation theories.
Team Development Strategies
This quiz will assess your knowledge of team-building processes, learning styles, and leadership methods. Team development is essential to creating and maintaining high performing teams.