Vegas Company has the following unit costs: Variable manufacturing overhead $ 25 Direct materials 20 Direct...
Vegas Company has the following unit costs: Variable manufacturing overhead $ 25
Direct materials 20
Direct labor 19
Fixed manufacturing overhead 12
Variable marketing and administrative 7.
Vegas produced and sold 10,000 units. If the product sells for $100, what is the operating profit using a contribution margin income statement?
Homework Answers
ANSWER:
variable costs = direct material + direct labor + variable manufacturing overhead + variable marketing & administrative overhead
= $20 + $19 + $25 + $7
= $71
therefore,
contribution margin income statement
| Particulars | Amount |
|---|---|
|
Sales ($100 x 10000) (-) variable costs ($71 x $10000) |
$1,000,000 $710,000 |
|
Contribution margin (-) fixed costs ($12 x 10000) |
$290,000 $120,000 |
| Operating profit | $170,000 |
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