FINANCIAL ACCOUNTING
10th Edition
ISBN: 9781259964947
Author: Libby
Publisher: MCG
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Step 1: Introductio
Costs that vary depending on the degree of manufacturing activity are known as variable costs. In contrast, fixed costs are expenses that remain constant regardless of how much manufacturing activity is taking place.
While fixed cost per unit fluctuates in response to variations in manufacturing activity, variable cost per unit stays constant.
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- Mulhiarrow_forwardA manufacturer's contribution margin income statement for the year follows. Prepare a contribution margin income statement if the number of units sold (a) increases by 300 units and (b) decreases by 300 units. Sales ($12 per unit x 10,300 units) $123,600 Variable costs 72,100 Contribution margin 51,500 Fixed costs Income 41,000 $ 10,500 Sales Variable costs Contribution Margin Income Statement For Year Ended December 31 Contribution margin Fixed costs Income 10,600 units sold 10,000 units sold $ 127,200 $ 120,000 $ 41,000 41,000 *Red text indicates no response was expected in a cell or a formula-based calculation is incorrect; no points deducted.arrow_forward
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