Problem
Stuart Manufacturing produces metal picture frames. The company's income statements for the last two years are given below
|
|
Last Year
|
This Year
|
|
Unit sold
|
50000
|
70000
|
|
Sales
|
800000
|
1120000
|
|
Less: Cost of goods sold
|
550000
|
710000
|
|
Gross margin
|
250000
|
410000
|
|
Less: Operating expenses
|
150000
|
190000
|
|
Net income
|
100000
|
220000
|
The company has no beginning or ending inventories.
Required:
• Estimate the company's total variable cost per unit and its total fixed costs per year. (Remember that this is a manufacturing firm.)
• Compute the company's contribution margin for this year.
The response should include a reference list. Double-space, using Times New Roman 12 pnt font, one-inch margins, and APA style of writing and citations.