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# Managerial Accting: Compare Anfers, Burton, Coley income statements

Questions are attached below

1) Income statements for three companies are provided below:

a. Prepare new income statements for the firms assuming each sells one additional unit (i.e. each firm sells 11 units).
b. Briefly describe the effect of cost structure on profitability.
2) William Samson Co. produces two products. The products' identified costs and production information are as follows:

The company's overhead costs are \$54,000.

a. Assuming the company allocates overhead on the basis of labor cost, compute the overhead and total production cost for both products.
b. Assuming the company allocates overhead on the basis of units produced, compute the overhead and total production cost for both products.

#### Solution Preview

1)
a) In the new income statement, Sales and variable costs will both increase by 10%. Therefore the new income statement is as follows:

| Anfers Co. | Burton Co. | Coley Co.
-------------------------------------------------------------------------------------
Sales (11 units) | \$440 | \$440 | \$440
------------------------------------------------------------------------------------- ...

#### Solution Summary

Explanation to problems with formulas.

\$2.19