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Salamone Corp. makes a desk specially designed for personal computers. The desk sells for $200.
Data for last year's operations follow:
Units in beginning inventory
0
Units produced
10,000
Units sold
9,000
Units in ending inventory
1,000
Variable costs per unit:
Direct materials
$ 40
Direct labour
35
Variable manufacturing overhead
10
Variable selling and administrative
25
Total variable cost per unit
$ 110
Fixed costs:
Fixed manufacturing overhead
$300,000
Fixed selling and administrative
450,000
Total fixed costs
$750,000
Required:
Assume that the company uses variable costing. Compute the unit product cost for one computer desk.
Assume that the company uses variable costing. Prepare a contribution format income statement for the year.
What is the company's break-even point in terms of units sold?
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