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4-52 Review of Chapters 2, 3, and 4 Kyu Lee Corporation provides you with the following miscellaneous data regarding operatio
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Answer #1

a.

Cost of goods sold = Direct material+direct labor+variable manufacturing overhead+Fixed manufacturing overhead

Cost of goods sold = Sales - Gross profit

Cost of goods sold = 100,000 - 20,000 = 80,000

$80,000 = 29,000+30,000+5,000+Fixed manufacturing overhead

Fixed manufacturing overhead = 80,000-29,000-30,000-5,000 = 16,000

b.

Contribution margin = Sales - Total variable cost

Total variable cost = $100,000 - 25,000 = $75,000

Variable selling and administrative expenses = $75,000 - 5,000 = $70,000

c.

Break even point in sales = Total fixed cost / Contribution margin ratio

Contribution margin ratio = Contribution/sales*100

Contribution margin ratio = $25,000/100,000*100 = 25%

Total fixed cost = 84,000*25% = 21,000

Fixed selling and administrative expenses = 21,000-16,000 = 5,000

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