Question

1.0

Gabuat Corporation, which has only one product, has provided the following data concerning its most recent month of operations:

Selling price	$ 151
Units in beginning inventory	0
Units produced	2,900
Units sold	2,380
Units in ending inventory	520

Variable costs per unit:
Direct materials	$ 53
Direct labor	$ 27
Variable manufacturing overhead	$ 6
Variable selling and administrative expense	$ 8
Fixed costs:
Fixed manufacturing overhead	$49,300
Fixed selling and administrative expense	$7,140

The total gross margin for the month under the absorption costing approach is:

4.0

Wight Corporation has provided its contribution format income statement for June. The company produces and sells a single product.

Sales (5,300 units)	$ 190,800
Variable expenses	84,800
Contribution margin	106,000
Fixed expenses	46,600
Net operating income	$ 59,400

If the company sells 5,400 units, its total contribution margin should be closest to: (Do not round intermediate calculations.)

13.

Tubaugh Corporation has two major business segments--East and West. In December, the East business segment had sales revenues of $240,000, variable expenses of $135,000, and traceable fixed expenses of $31,000. During the same month, the West business segment had sales revenues of $910,000, variable expenses of $480,000, and traceable fixed expenses of $173,000. The common fixed expenses totaled $254,000 and were allocated as follows: $127,000 to the East business segment and $127,000 to the West business segment.

A properly constructed segmented income statement in a contribution format would show that the segment margin of the East business segment is:

Answer 1

0

$114,240 1.0 Total gross margin for the month absorption costing approach Sales Cost of goods sold Gross margin $359,380 2,380*$151 $245,140 2,380*$103 $114,240 $53 $271 Unit Product Cost-Absorption Costing Direct materials Direct labor Variable manufacturing overheads Fixed manufacturing overheads Unit product cost $6 $17 ($49,300/2,900 units) $103 $108,000 4.0 Total contribution margin if 5,400 units are sold Units sold Contribution margin per unit Total Contribution margin 5,4001 $200 $108,000 Sales Variable cost Contribution margin Total $190,800 $84,800 $106,000 Per unit $36.00 $16.00 $20.00 13 Segment margin of the East business segment $74,000 Sales Variable cost Contribution margin Traceable fixed cost Segment margin East $240,000 $135,000 $105,000 $31,000 $74,000 West $910,000 $480,000 $430,000 $173,000 $257,000