Solution 1-3:
Particulars | Per unit amount | Total | |||
Normal Volume | New Business | Normal Volume | New Business | Combined | |
Sales | $3.93 | $3.34 | $1,572,000.00 | $223,780.00 | $1,795,780.00 |
Variable costs: | |||||
Direct materials | $1.28 | $1.28 | $512,000.00 | $85,760.00 | $597,760.00 |
Direct labor | $0.32 | $0.48 | $128,000.00 | $32,160.00 | $160,160.00 |
Variable overhead | $0.67 | $0.67 | $268,800.00 | $45,024.00 | $313,824.00 |
Total variable costs | $2.27 | $2.43 | $908,800.00 | $162,944.00 | $1,071,744.00 |
Contribution margin | $1.66 | $0.91 | $663,200.00 | $60,836.00 | $724,036.00 |
Fixed Costs | |||||
Fixed manufacturing overhead | $115,200.00 | $0.00 | $115,200.00 | ||
Selling expenses | $160,000.00 | $0.00 | $160,000.00 | ||
Administrative expenses | $107,000.00 | $4,000.00 | $111,000.00 | ||
Total fixed expenses | $382,200.00 | $4,000.00 | $386,200.00 | ||
Net Operating income | $281,000.00 | $56,836.00 | $337,836.00 |
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