For Year Ended December 31 Contribution Margin Income Statement Sales (90,000 units). Variable costs Direct materials Direct labor Variable overhead i Contribution margin Fixed costs Buon margin income statement TORC Fixed overhead Fixed general and administrative Income Per Unit $ 60.00 30.00 9.00 10.00 11.00 3.00 2.00 $6.00 Annual Total $5,400,000 2,700,000 810,000 900,000 990,000 270,000 180,000 $ 540,000 A potential customer offers to buy 11,000 units for $50.00 each. These sales would not affect the company's
For Year Ended December 31 Contribution Margin Income Statement Sales (90,000 units). Variable costs Direct materials Direct labor Variable overhead i Contribution margin Fixed costs Buon margin income statement TORC Fixed overhead Fixed general and administrative Income Per Unit $ 60.00 30.00 9.00 10.00 11.00 3.00 2.00 $6.00 Annual Total $5,400,000 2,700,000 810,000 900,000 990,000 270,000 180,000 $ 540,000 A potential customer offers to buy 11,000 units for $50.00 each. These sales would not affect the company's
Chapter1: Financial Statements And Business Decisions
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In layman's terms, variance analysis is an analysis of a difference between planned and actual behavior. Variance analysis is mainly used by the companies to maintain a control over a business. After analyzing differences, companies find the reasons for the variance so that the necessary steps should be taken to correct that variance.
Standard Costing
The standard cost system is the expected cost per unit product manufactured and it helps in estimating the deviations and controlling them as well as fixing the selling price of the product. For example, it helps to plan the cost for the coming year on the various expenses.
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Transcribed Image Text:FURY produces and sells skateboards. Its contribution margin income statement follows.
Contribution Margin Income Statement
For Year Ended December 31
Sales (90,000 units)
Variable costs
Direct materials
Direct labor.
Variable overhead i
Contribution margin
Fixed costs
Fixed overhead
Fixed general and administrative
Income
Per Unit
$ 60.00
30.00
9.00
10.00
11.00
3.00
2.00
$ 6.00
Annual Total
$ 5,400,000
2,700,000
810,000
900,000
990,000
270,000
180,000
$ 540,000
A potential customer offers to buy 11,000 units for $50.00 each. These sales would not affect the company's sales through its normal
channels Details of the special offer follow.
• Variable costs per unit would not change.
Accepting the offer would require incremental fixed overhead costs of $11,000
Accepting the offer would require incremental fixed general and administrative costs of $16,500
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