Question

The Dogri Company provides you with the following miscellaneous data regarding operations in 20X9: (Click the icon to view the data.) Requirements Compute (a) variable selling and administrative expenses, (b) contribution margin in dollars, (c) variable manufacturing overhead, (d) break-even point in sales dollars, and (e) manufacturing cost of goods sold. Complete the income statement to solve for (a) variable selling and administrative expenses, (c) variable manufacturing overhead, and (e) manufacturing cost of goods sold. Data Table Cost of goods manufactured and sold $ 49,000 Gross profit Net profit 21,000 Sales Direct materials used Total manufacturing cost of goods sold Gross profit Selling and administrative expenses: 200,000 109,000 28,000 Direct labor 10,000 Fixed manufacturing overhead Fixed selling and administrative expenses 11,000 There are no beginning or ending inventories Net profit Print Done

Answer 1

Answer

INCOME STATEMENT

Particulars	$	$
Sales		200,000
Less cost of goods manufactured andsold
Direct material used	109,000
Direct labour	28,000
Fixed manufacturing overhead	10,000
VARIABLE MANUFACTURING OVERHEAD (c)	4,000
Less TOTAL COST OF GOODSMANUFACTUREDAND d SOLD (e)		151,000
Gross profit		49,000
Selling and administrative expenses:
VARIABLE SELLING AND ADMINISTRATIVE EXPENSES (a)	17,000
Fixed selling and administrative expenses	11,000
Total selling and administrative expenses		28,000
Net profit		21,000

a variable selling and administrative expenses is $17,000 (Computed from income statement).

b Contribution marginal = sales - variable costs

Variable cost include direct material, direct labour, variable manufacturing overhead and variable selling and administrative expenses

Variable cost

= 109,000 + 28,000 + 4,000 + 17,000 = $158,000

Contribution margin = 200,000 - 158,000 = $42,000

Contribution margin in dollar is $42,000

c Variable manufacturing overhead is $4,000 (computed from income statement).

d   BREAK EVEN POINT IN DOLLAR

= Fixed cost / contribution margin ratio

Contribution margin ratio = contribution margin / sales

Contribution margin ratio = 42,000 / 200,000 = 0.21

Fixed cost = 10,000 + 11,000 = $22,000

Break even point in dollar

= 22,000 / 0.21 = $104,762

Break even point in dollar is $104,762.

e Manufacturing cost of goods sold is $151,000 (calculated from income statement).

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