Problem 2:
The following is the current variable costing income statement for Dolly Corporation.
Sales (5,000 units) $100,000
Variable expenses Cost of goods sold $35,000
Selling (10% of sales) $10,000 $45,000
Contribution margin $55,000
Fixed expenses
Manufacturing overhead $24,000
Administrative $12,500 $36,500
Operating income $18,500
Below is the following information on operations for Dolly Corporation.
Beginning inventory (units) 0
Units produced (units) 6,000
Manufacturing costs
Direct labor (per unit) $5.00
Direct materials (per unit) $2.30
Variable overhead (per unit) $2.40
Required:
Prepare an absorption costing income statement.
Problem 3:
. The following information was compiled for two models of cell phones.
3G model
4G model
Average
Budgeted Contribution Margin
$80.00
$120.00
$95.25
Budgeted
Sales in Units
28,000
18,000
Actual
Sales in Units
28,600
16,500
Calculate the sales mix variance. (Show your calculations.)