Page10> of 12ZOOMIn Class Practice Example: Contribution Margin Income StatementInformation:Whitier Company plans to sell 1,000 mowers at $400 each in the coming year. Product costs include:$ 180Direct materials per mowerDirect labor per mower10025Variable factory overhead per mowerTotal fixed factory overhead15,000Variable selling expense is a commission of $20 per mower; fixed selling and administrative expense totals$30,000.Required:1. Calculate the total variable expense per unit.2. Calculate the total fixed expense for the year.3. Prepare a contribution margin income statement for Whitier for the coming year. Page <12> of 12ZOOM-In Class Exercise:Convert tradition income statement to contribution margin income statement(by cost Perbehavior) unitTraditional(byContributionRatiofunction)margin100,000 Sales(10,000units)Variable Cost of goods 20,000 Variable CostsSales (10,000 units)100,00010.001.0soldFixed cost of goods 10,000V CGSsoldTotal Cost of Goods 30,000V sellSoldGross profit70,000V adminTotalvariablecostsSellingandContributionadministrative:MarginVariable selling costs5,000Fixed selling costs7,000 Fixed expensesVariable administrative8,000Fixed CGScostsFixed administrative 12,000Fixed sellcostsTotal selling and admin 32,000Fixed adminexpensesTotal Fixed ExpNet Income38,000 Net Income

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Information: Whitfer Company plans to sel 1,000 mowers at $400 each in the coming year. Product costs indude: Direct materials per mower Direct labor per mower Variable foctory overhead per mower Total fixed factory overhead $ 180 100 25 15,000 Variable selling expense is a commission of $20 per mower; fixed selling and administrative expense totals $30,000. Required: 1. Calculate the total variable expense per unit. 2. Calculate the total fixed expense for the year. 3. Prepare a contribution margin income statement for Whitier for the coming year.

Information: Whitfer Company plans to sel 1,000 mowers at $400 each in the coming year. Product costs indude: Direct materials per mower Direct labor per mower Variable foctory overhead per mower Total fixed factory overhead $ 180 100 25 15,000 Variable selling expense is a commission of $20 per mower; fixed selling and administrative expense totals $30,000. Required: 1. Calculate the total variable expense per unit. 2. Calculate the total fixed expense for the year. 3. Prepare a contribution margin income statement for Whitier for the coming year.

Survey of Accounting (Accounting I)

8th Edition

ISBN:9781305961883

Author:Carl Warren

Publisher:Carl Warren

Chapter11: Cost-volume-profit Analysis

Section: Chapter Questions

Problem 11.16E

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