Q1) Lucido Products markets two computer games: Claimjumper and Makeover. Contribution format income statement for recent month for two games given below:
| |
Claimjumper |
Makeover |
Total |
| Sales |
$30,000 |
$70,000 |
$100,000 |
| Less variable expanses |
20,000 |
50,000 |
70,000 |
| Contribution margin |
$10,000 |
$20,000 |
30,000 |
| Less fixed expenses |
|
|
24,000 |
| Net operating income |
|
|
$6,000 |
Questions:
1. Calculate overall contribution margin (CM) ratio for company.
2. Calculate overall break-even point for company in sales dollars.
3. Verify overall break-even point for company by creating contribution format income statement illustrating the suitable levels of sales for the two products.
4. Jamil Company, that has only one product, has given the following data concerning its most recent month of operations:
Selling price
|
$71
|
Units in beginning inventory
|
400
|
Units produced
|
8,100
|
Units sold
|
8,200
|
Units in ending inventory
|
300
|
Variable cost per unit:
|
|
Direct Materials
|
$20
|
Direct Labor
|
$15
|
Variable manufacturing overhead
|
$6
|
Variable selling and administrative
|
$4
|
Fixed costs:
|
|
Fixed manufacturing overhead
|
$64,800
|
Fixed selling and administrative
|
$139,400
|
Company manufactures same number of units every month, though sales in units vary from month to month.
Company variable costs per unit and total fixed costs have been constant from month to month.
Questions:
(a) Determine unit product cost for month under variable costing?
(b) Determine the unit product cost for month under absorption costing?
(c) Determine th net operating income for month under variable costing?
(d) Compute net operating income for month under absorption costing?