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Question - The BC Supply manufactures memory cards that sell to wholesalers for $2.00 each. Variable and fixed costs are as follows:
Variable Costs per card:
Fixed Costs per Month:
Manufacturing
Direct materials $0.30
Direct labor 0.25
Factory overhead 0.25 0.80
Factory overhead $4,000
Selling and admin. 0.15
Selling and admin. 3,000
Total $0.95
Total $7,000
BC Supply produced and sold 10,000 cards during October. There were no beginning or ending inventories.
Required -
(a) Create a contribution income statement for October.
(b) Determine BC Supply's monthly break-even point in units.
(c) Determine the effect on the monthly profit of a 1,700 unit increase in monthly sales.
(d) If BC Supply is subject to an income tax of 34 percent, determine the dollar sales volume required to earn a monthly after-tax profit of $22,000.
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