Bundle: Financial & Managerial Accounting, 13th + Working Papers, Volume 1, Chapters 1-15 For Warren/reeve/duchac’s Corporate Financial Accounting, ... 13th + Cengagenow™v2, 2 Terms Access Code
13th Edition
ISBN: 9781337062268
Author: Carl S. Warren, James M. Reeve, Jonathan Duchac
Publisher: Cengage Learning
expand_more
expand_more
format_list_bulleted
Concept explainers
Videos
Question
Chapter 20, Problem 20.4CP
(1)
To determine
Contribution Margin
Contribution margin is the excess of manufacturing margin above selling and administrative expenses. Contribution margin is calculated by deducting variable cost from sales or deducting variable selling and administrative expenses from manufacturing margin.
To Calculate: The manufacturing margin ratio and contribution margin ratio for each salespersons of Incorporation JE.
(2)
To determine
To Explain: The result of the analysis related to manufacturing margin ratio and contribution margin ratio.
Expert Solution & Answer
Want to see the full answer?
Check out a sample textbook solution
Students have asked these similar questions
Analyzing profitability
Father Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow:
Father Furniture has three sales representatives: Adam, Ben, and Caleb. Adam sold 100 tables With 6 chairs each. Ben sold 110 tables With 4 chairs each. Caleb sold 80 tables with 8 chairs each.
Requirements
Calculate the total contribution margin and the contribution margin ratio for each sales representative (round to two decimal places).
Which sales representative has the highest contribution margin ratio? Explain Why
Classify each of the customer-level operating costs as a customer output unit–level, customer batchlevel, or customer-sustaining cost.
Analyzing profitability
Relative Furniture Company manufactures and sells oak tables and chairs. Price and cost data for the furniture follow:
Relative Furniture has three sales representatives: Abe, Brett, and Corrin. Abe sold 50 tables With 4 Chairs each. Brett sold 110 tables With 6 chairs each. Corrin sold 90 tables with 8 chairs each.
Requirements
Calculate the total contribution margin and the contribution margin ratio for each sales representative (round to two decimal places).
Which sales representative has the highest contribution margin ratio? Explain why.
Chapter 20 Solutions
Bundle: Financial & Managerial Accounting, 13th + Working Papers, Volume 1, Chapters 1-15 For Warren/reeve/duchac’s Corporate Financial Accounting, ... 13th + Cengagenow™v2, 2 Terms Access Code
Ch. 20 - What types of costs are customarily included in...Ch. 20 - Which type of manufacturing cost (direct...Ch. 20 - Which of the following costs would be included in...Ch. 20 - In the variable costing income statement, how are...Ch. 20 - Since all costs of operating a business are...Ch. 20 - Discuss how financial data prepared on the basis...Ch. 20 - Why might management analyze product...Ch. 20 - Explain why rewarding sales personnel on the basis...Ch. 20 - Discuss the two factors affecting both sales and...Ch. 20 - How is the quantity factor for an increase or a...
Ch. 20 - Explain why service companies use different...Ch. 20 - Prob. 20.1APECh. 20 - Variable costing Marley Company has the following...Ch. 20 - Variable costingproduction exceeds sales Fixed...Ch. 20 - Variable costingproduction exceeds sales Fixed...Ch. 20 - Variable costingsales exceed production The...Ch. 20 - Variable costing sales exceed production The...Ch. 20 - Analyzing income under absorption and variable...Ch. 20 - Analyzing income under absorption and variable...Ch. 20 - Contribution margin by segment The following...Ch. 20 - Contribution margin by segment The following...Ch. 20 - Contribution margin analysis The actual price for...Ch. 20 - Contribution margin analysis The actual variable...Ch. 20 - Inventory valuation under absorption costing and...Ch. 20 - Income statements under absorption costing and...Ch. 20 - Income statements under absorption costing and...Ch. 20 - Cost of goods manufactured, using variable costing...Ch. 20 - Variable costing income statement On June 50, the...Ch. 20 - Absorption costing income statement On July 31,...Ch. 20 - Variable costing income statement The following...Ch. 20 - Estimated income statements, using absorption and...Ch. 20 - Variable and absorption costing Ansara Company had...Ch. 20 - Variable and absorption costingthree products...Ch. 20 - Prob. 20.11EXCh. 20 - Product profitability analysis Power Train Sports...Ch. 20 - Territory and product profitability analysis Coast...Ch. 20 - Prob. 20.14EXCh. 20 - Segment profitability analysis The marketing...Ch. 20 - Prob. 20.16EXCh. 20 - Prob. 20.17EXCh. 20 - Prob. 20.18EXCh. 20 - Contribution margin analysis variable costs Based...Ch. 20 - Variable costing income statement for a service...Ch. 20 - Contribution margin reporting and analysis for a...Ch. 20 - Variable costing income statement and contribution...Ch. 20 - Prob. 20.1APRCh. 20 - Income statements under absorption costing and...Ch. 20 - Absorption and variable costing income statements...Ch. 20 - Salespersons' report and analysis Walthman...Ch. 20 - Prob. 20.5APRCh. 20 - Contribution margin analysis Dozier Industries...Ch. 20 - Absorption and variable costing income statements...Ch. 20 - Income statements under absorption costing and...Ch. 20 - Absorption and variable costing income statements...Ch. 20 - Salespersons' report and analysis Pachec Inc....Ch. 20 - Prob. 20.5BPRCh. 20 - Contribution margin analysis Mathews Company...Ch. 20 - Prob. 20.1CPCh. 20 - Prob. 20.3CPCh. 20 - Prob. 20.4CPCh. 20 - Prob. 20.5CP
Knowledge Booster
Learn more about
Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.Similar questions
- Ruby Company manufactures and sells a single product. The company's sales and expenses for last year follow: ss attachedarrow_forwardCalculate the total contribution margin and the contribution margin ratio for each sales representative (round to two decimals places)arrow_forwardGalaxy Sports Inc. manufactures and sells two styles of All Terrain Vehicles (ATVs), the Conquistador and Hurricane, from a single manufacturing facility. The manufacturing facility operates at 100% of capacity. The following per-unit information is available for the two products: In addition, the following sales unit volume information for the period is as follows: a. Prepare a contribution margin by product report. Compute the contribution margin ratio for each. b. What advice would you give to the management of Galaxy Sports Inc. regarding the profitability of the two products?arrow_forward
- Salespersons report and analysis Walthman Industries Inc. employs seven salespersons to sell and distribute its product throughout the state. Data taken from reports received from the salespersons during the year ended December 31 are as follows: Instructions 1. Prepare a table indicating contribution margin, variable cost of goods sold as a percent of sales, variable selling expenses as a percent of sales, and contribution margin ratio by salesperson. (Round whole percent to one digit after decimal point.) 2. Which salesperson generated the highest contribution margin ratio for the year and why? 3. Briefly list factors other than contribution margin that should be considered in evaluating the performance of salespersons.arrow_forwardM & J Mechanical sells and services plumbing, heating, and air conditioning systems. M & J's cost accounting system tracks two cost categories: direct labor and direct materials. M & J uses a time-and-materials pricing system, with direct labor marked up 100% and direct materials marked up 40% to recover indirect costs of support staff, support materials, and shared equipment and tools and to earn a profit. Data table During a hot summer day, the central air conditioning in Susan Lee's home stops working. M & J technician Sam Austen arrives at Lee's home and inspects the air conditioner. He considers two options: replace the compressor or repair it. The cost information available to Austen follows: Repair option Replace option Labor rate Labor 7 hrs. 1 hrs. $40 per hour Materials $160 $280 Xarrow_forwardStable Paper Delivery has decided to analyze the profitability of five new customers. It buys recycled paper at $12 per case and sells to retail customers at a list price of $14.80 per case. Data pertaining to the five customers are: E (Click the icon to view the data.) Stable Paper Delivery's five activities and their cost drivers are as follows: E (Click the icon to view the activities and cost drivers.) Read the requirements. Requirement 1. Compute the customer-level operating income of each of the five retail Begin by calculating each customer's gross margin. Then calculate the operating incom minus sign for operating losses.) Requirements 1 2 1. Compute the customer-level operating income of each of the five retail customers now being examined (1, 2, 3, 4, and 5). Comment on the results. 2. What insights do managers gain by reporting both the list selling price and the actual selling price for each customer? 3. What factors should managers consider in deciding whether to drop one…arrow_forward
- V&S Mechanical sells and services plumbing, heating, and air conditioning systems. V&S's cost accounting system tracks two cost categories: direct labor and direct materials V&S uses a time-and-materials pricing system, with direct labor marked up 100% and direct materials marked up 50% to recover indirect costs of support staff, support materials, and shared equipment and tools and to earn a profit (Click the icon to view the cost information) Read the requirements Requirement 1. If Dryden presents Lowry with the replace or repair options, what price would he quote for each? Complete the table below to determine the price Dryden would quote for each option Labor Materials Total Price Repair option Replace option Requirements 1. if Dryden presents Lowry with the replace or repair options, what price would he quote for each? 2. If the two options were equally effective for the 3 years that Lowry intends to live in the home, which option would she choose? 3. if Dryden's objective is to…arrow_forwardManjiarrow_forwardEthan Manufacturing Incorporated produces floor mats for automobiles. The owner, Joseph Ethan, has asked you to assist in estimating maintenance costs. Together, you and Joseph determine that the single best cost driver for maintenance costs is machine hours. These data are from the previous fiscal year for maintenance costs and machine hours: 1. What is the cost equation for maintenance costs using the high-low method? 2. Calculate the mean absolute percentage error (MAPE) for the cost equation you developed in requirement 1. Month Maintenance Costs Machine Hours 1 $ 2,660 1,750 2 2,820 1,830 3 2,970 1,910 4 3,080 1,930 5 3,160 1,960 6 3,130 1,940 7 3,070 1,920 8 2,910 1,900 9 2,680 1,760 10 2,280 1,160 11 2,290 1,360 12 2,510 1,650arrow_forward
- Slarlet Beauty manufactures and sells a face cream lo small specialy stores in the greater Los Angeles area. It presents the monthly operating income stalement shown here to George Diaz, a polenial investor in the business. Help Mr. Diaz understand Starlet Beauty's cost structure. E(Click the icon to view the operating income stalement.) Read the equirements. Data Table Requirement 1. Recast the income statement to emphasize contribution margin. Starlet Cosmetics Operating Income Statement, June 2017 Starlet Beauty Operating Income Statement, June 2017 10,000 Units sold Revenues 200,000 Cost of goods sold Variable manufacturing costs 80,000 32,900 Fixed manufacturing costs 112,900 Total Gross margin 87,100 Operating costs Variable marketing costs 48,000 17.500 Fixed marketing and administrative costs 65,500 Total operating costs 21,600 Operating income Print Done Choose from any list or enter any number in the input fields and then click Check Answer.arrow_forwardBright Force Inc. produces and sells lighting fixtures. An entry light has a total cost of $90 per unit, of which $50 is product cost and $40 is selling and administrative expenses. In addition, the total cost of $90 is made up of $55 variable cost and $35 fixed cost. The desired profit is $20 per unit. Determine the markup percentage on product cost. Round the answer to nearest whole number.arrow_forwardSubject: accountingarrow_forward
arrow_back_ios
SEE MORE QUESTIONS
arrow_forward_ios
Recommended textbooks for you
Managerial AccountingAccountingISBN:9781337912020Author:Carl Warren, Ph.d. Cma William B. TaylerPublisher:South-Western College Pub
Financial And Managerial AccountingAccountingISBN:9781337902663Author:WARREN, Carl S.Publisher:Cengage Learning,
Principles of Accounting Volume 2AccountingISBN:9781947172609Author:OpenStaxPublisher:OpenStax College
Principles of Cost AccountingAccountingISBN:9781305087408Author:Edward J. Vanderbeck, Maria R. MitchellPublisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...AccountingISBN:9781305970663Author:Don R. Hansen, Maryanne M. MowenPublisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...StatisticsISBN:9781305627734Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. AndersonPublisher:Cengage Learning
Managerial Accounting
Accounting
ISBN:9781337912020
Author:Carl Warren, Ph.d. Cma William B. Tayler
Publisher:South-Western College Pub
Financial And Managerial Accounting
Accounting
ISBN:9781337902663
Author:WARREN, Carl S.
Publisher:Cengage Learning,
Principles of Accounting Volume 2
Accounting
ISBN:9781947172609
Author:OpenStax
Publisher:OpenStax College
Principles of Cost Accounting
Accounting
ISBN:9781305087408
Author:Edward J. Vanderbeck, Maria R. Mitchell
Publisher:Cengage Learning
Cornerstones of Cost Management (Cornerstones Ser...
Accounting
ISBN:9781305970663
Author:Don R. Hansen, Maryanne M. Mowen
Publisher:Cengage Learning
Essentials of Business Analytics (MindTap Course ...
Statistics
ISBN:9781305627734
Author:Jeffrey D. Camm, James J. Cochran, Michael J. Fry, Jeffrey W. Ohlmann, David R. Anderson
Publisher:Cengage Learning
Cost Accounting - Definition, Purpose, Types, How it Works?; Author: WallStreetMojo;https://www.youtube.com/watch?v=AwrwUf8vYEY;License: Standard YouTube License, CC-BY